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Minutes Away: Fed Announces Next Interest Rate Decision; Putin & Xi Pledge To Expand Ties In Show Of Unity; Zelenskyy Visits Troops On Front Lines In Donetsk Region; Suspect On Loose After Shooting Two Staff Members At Denver HS; CNN Joins Prince William's Visit With British Troops In Poland; Supreme Court To Hear Jack Daniels Case Against Dog Toy Maker. Aired 1:30-2p ET
Aired March 22, 2023 - 13:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: And I can show you all of the rate hikes over this most recent rate-hiking cycle, starting in March with 25 basis points or a quarter of 1 percent and it has gone on and on and on.
And now, on the one hand, that has made, as you pointed out, rates for practically everything higher, right? It has made credit card rates spike. It has made mortgage rates spike.
And that is the point. The Fed is trying to get us to stop spending as much so that helps on the inflation front.
The other side of this, however, is that those higher rates have created vulnerabilities for some of these banks, right, and that's what we saw with SVB.
And so that is the needle that the Fed has to thread. That is the sort of fine line that Jay Powell, the Federal Reserve chairman, has to strike when we hear from him in almost exactly an hour.
Essentially, can he prove to investors, can he prove it to all of us, can he prove to all of us that he can walk and talk at the same time in terms of both of these goals?
BRIANNA KEILAR, CNN HOST: If you see another rate hike today, I mean, knowing that rates are pretty high and banks know that and some of them are experiencing some liquidity challenges or tightening because of that, do you think that banks will spook on a rate hike?
SOLOMON: I think if we see a rate hike of a quarter of a percent, it's priced in. We're expecting it. I think anything more aggressive than that would certainly create a negative reaction in the markets.
Because I think, at that point, the concern grows that they might be over doing it right. I mean, the tightening that we're seeing with some of these banks, you could argue that is essentially the equivalent of a rate hike.
And so this banking instability that we are in the midst of, that is yet another wild card in an economy that has been dealt quite a few wild cards, right?
And so there was really this feeling that, OK, at this point, maybe take a beat. Maybe take a moment to just sort of check the scenery out before over doing it.
So certainly, I think anything more than a quarter of a percent, we're going to be in for a rocky day, for sure.
KEILAR: All right, Rahel, we'll be watching with you coming up soon here in about an hour.
Right now, I want to bring in University of Michigan economics professor, Justin Wolfers.
Professor. Always great to have you to explain some of these things to us at this time when I think a lot of people are a little uncertain.
I wonder if you think that the Fed is watching these expectations. Are they seeing - is the Fed looking at this saying, OK, if we do more than 25 basis points, banks may spook, and factoring that into the calculus or no?
JUSTIN WOLFERS, ECONOMICS & PUBLIC POLICY PROFESSOR, UNIVERSITY OF MICHIGAN: Unquestionably, yes. So there are really good debates to be had about whether we should raise interest rates by a little bit, by a lot, or pause right now.
But I'm certain that the Fed has one really important objective, which is it can achieve what it wants on its inflation side by moving the interest rate and not harm financial stability if it shows itself to be really predictable.
And Jay Power's Fed has been wonderfully boringly, splendidly predictable. If you listen to what it says, it tells you what it's about to do.
And so right now, markets say there's an 85 percent chance of a 25- basis-point rise and a 15 percent chance of no rise whatsoever. And I think there's no chance that they're going to try anything outside of those two main expected outcomes.
KEILAR: What are you listening for? I mean, aside from what the rate hike may be, or may not be, what are you listening for in the explanation?
WOLFERS: Yes, so if the Fed decides not to change the interest rate, the most important question here, is it just playing wait and see, that is, is this a right rise delayed or right rise denied?
I think there's a very strong case for the Fed to do a little less right now than it might otherwise do while it just waits for things to shake out realizing that means that if rates don't rise by much today, they may catch up by the next meeting or the meeting after.
KEILAR: Democratic Senator Elizabeth Warren says that Jerome Powell should be out as Fed chair. And some top economists are giving the Fed pretty low marks when it comes to the dual challenges that they're working here.
How do you see it?
WOLFERS: Well. One of the reasons I became an economist is because I care deeply about unemployment and the dignity that work brings. And it's worth celebrating the fact that right now unemployment is awfully close to being at a 50-year low.
So we face our challenges for sure. That's the inflation challenge. But let's also celebrate the really good news, which is people that want work can find work.
And I should also say that there's a lot of really bad behavior coming out of Silicon Valley over the past week, but the Fed and the treasury have done a, I think, terrific job calming to the public and stopping what could have been contagion in its footsteps.
And so I'm not expecting to see a lot more financial distress.
And the really great news will be all the headlines we don't read. And I want all your viewers to think about the headlines they didn't read this week about there weren't big headlines about new banks collapsing and that's really something.
KEILAR: Yes, those are easy to forget, right? The bad thing that didn't happen because, how do you know? But a very good point there.
Justin, thanks for being with us.
WOLFERS: A great pleasure.
KEILAR: Two world leaders, one common goal, challenging the U.S. as a superpower. We're going to take a closer look at this growing alliance between Russia and China.
We're also following breaking news out of Denver. Two faculty members shot and wounded at a high school. And the alleged shooter, a student, is still on the loose.
KEILAR: China and Russia, sending a message to the world, the two countries are bolstering their alliance. Xi Jinping has wrapped up his three-day visit to Moscow, providing a boost to a Russian president who is becoming more isolated.
Xi and Vladimir Putin claiming to discuss a peace plan for Russia's war against Ukraine.
But Ukraine's president posted this video on social media, a missile strike on a residential building in Zaporizhzhia. At least one person was killed in this. Seven more died in a wave of Russian drone attacks in the Kiev region.
A short time ago, the White House scoffed at the idea of Putin seeking a peaceful negotiation.
(BEGIN VIDEO CLIP)
ADM. JOHN KIRBY, NATIONAL SECURITY COUNCIL SPOKESMAN: The day after President Xi and President Putin in Moscow talk about peace and talk about trying to find a way for a negotiated settlement and cessation of hostilities, and the day after that, Mr. Putin launches drones and missiles at least two different cities inside Ukraine, hitting civilian targets.
It just shows you how insincere Mr. Putin is about any effort to try to end this war.
(END VIDEO CLIP)
KEILAR: Let's discuss with CNN global affairs analyst, Kimberly Dozier. She's also the senior managing editor of "Military Times."
Kim, what's happening here? What is China trying to do here? What is Russia trying to do here?
KIMBERLY DOZIER, CNN GLOBAL AFFAIRS ANALYST: Well, this is a move to bolster Russia at a time when Putin is under siege on multiple fronts. Of course, the sanctions, the recent ICC Hague court arrest warrant.
And also just economically in general. Every single deal that Putin signs with Chinese President Xi lengthens Putin's hold on power.
But if China was really serious about a peace deal, they wouldn't have gone about it like this, I don't think. They would have been including also Zelenskyy, a meeting with the Ukrainian president as part of negotiations.
And in their 12-point plan, it would have had to have included something about the original territorial integrity of Ukraine and Russia pulling back. We don't see that.
KEILAR: No, we certainly don't.
And then you have the Ukrainian President Volodymyr Zelenskyy today, making this surprise visit. He goes out to the front lines. He's in Donetsk in the east.
What's the significance of that visit so close to some of the most intense fighting? And also, at this point in time, where you have Russia trying to make sort of a big statement with China?
DOZIER: Well, he had to answer Putin's nighttime visit in the past week to parts of Ukraine that Russia's occupying.
But also what I've been hearing from people on the ground is that there's a real loss of morale among Ukrainian troops and among Ukrainian high officials. Because there have been so many soldiers lost, who had a high degree of training, including many of those who NATO had trained prior to this latest Russian invasion.
And that's hit people hard. They're wondering, how can they make up for the losses? And they're having to send troops who are very green to the field with, say, two weeks of training.
And "Military Times" reporting also shows that some of the troops in the middle of the fight for Bakhmut, that besieged city, feel like they're not being resupplied by their own high command, that they're just being used as cannon fodder against Russian troops.
And a presidential visit is a chance to shore up that flagging morale but also to say for himself, what's going on, what's working and what's not.
KEILAR: Yes, it certainly is.
Kim, thank you so much. Kim Dozier, we appreciate you being with us today.
And we have more now on that breaking news in Denver. We have a live look at the area around Denver's East High School. This is where a student is accused of shooting two faculty members.
CNN's Whitney Wild is joining us now with some new information really developing moment by moment here.
Whitney, what have you learned?
WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, certainly. So, Brianna, what we know is that these two faculty members are in various stages of their care.
One of these faculty members who was shot and is in critical condition. Another faculty member is in serious condition, but alert enough to give a description of what happened.
And what we are learning, Brianna, is that, while this happened at a high school, and there was another student who witnessed it, and who was so traumatized by the incident that that student received medical care and was transported to the hospital.
This safety check that the student was to undergo every single day happened in an administrative area of the school away from other students.
So earlier, you and I were talking about this safety protocol at the school and whether or not the school was doing enough to protect the people within this school.
And so right now, what we're learning from officials is that their safety plan was that this student was supposed to undergo basically safety check every day, a pat down every day. It was to happen again away from other students. [13:45:07]
But in this process, the student produced a firearm, produced a handgun and shot these two male members of the faculty.
The Denver police are actively searching for this student. They're not releasing his name because he's a juvenile.
Right now, they have limited information. One of the one of the pieces of the description, Brianna, includes this student was wearing a hoodie with an astronaut on it.
But what's important to note, Brianna, is if they knew enough about this student to develop this, what they believed at the time was a robust safety plan.
They certainly have a lot of information about this student so you can be assured Denver police is contacting everybody in his orbit, every adult in his orbit.
And certainly, they know where he lives. As I was saying before, highly likely they are, you know, at the door or inside that home as we speak. And so right now, this manhunt is underway to try to find this suspect.
Again, as I was saying before, just to give you an idea of this school, you know, this is a school in the city of Denver, 2,500 students. Certainly, a shocking incident for every one of those students, no matter how close they were - Brianna?
KEILAR: Yes, certainly. We see students here leaving campus, it appears. School is going to be closed for the rest of the week following this incident. We will be tracking the conditions of these two faculty members hoping that they recover here.
Whitney Wild, thank you so much for an update on that.
Prince William is on the doorstep of Russia's war in Ukraine. CNN accompanying the prince on his surprise visit to see British troops in Poland. We'll go live to Warsaw.
KEILAR: New this hour, Prince William making a secret trip to Poland to visit British and Polish troops. That military base near the Ukrainian border.
CNN's Max Foster traveled with the prince. He is joining us now, live from Warsaw.
Max, tell us about the reason for this trip.
MAX FOSTER, CNN ROYAL CORRESPONDENT: What's interesting, he's been here all day. As you say, there's been a media blackout because he's been over in the east of the country in an area called Yezhov (ph). It's about two hours from Lviv in Ukraine, so it is close to the border.
And this is where British and Polish troops are working together. And in the prince's words, they've been supporting the freedom of the people of Ukraine. "That's also our freedom," he said.
He's very keen to show off what Poland has been doing, continues to do the huge effort that they played to support Ukraine in the ward, Ukraine. So it's interesting that he went all the way over there.
I know the British security services, I'm sure the Polish security services as well very concerned about his safety. They weren't allowed to report any of it until he actually traveled here to Warsaw this evening.
But it was interesting to see him out there. Really, Brianna, it's quite a political message really.
You'd expect to hear those sorts of words from a prime minister rather than a royal. But from the very the beginning of this war, the royal family has really got behind Ukraine. So more of that, really.
KEILAR: And what's he doing in Warsaw, now that he has moved away from the border?
FOSTER: Well, he has been taking quite an interest in the humanitarian effort that Poland put into this and also continues to put into it.
So he's interested in seeing what they're doing with more than 1.5 million Ukrainian refugees who come to Poland.
And that they had been fully integrated. It's fascinating when you're here. You're walking down the high street, for example, here in Warsaw, and you can hear many Ukrainian voices.
They've been fully integrated into society. That's what it feels like anyway. If they haven't gotten accommodation, they're being given homes with local families.
But William was here to visit an area where you could find beds. It's a former office block. They've converted into a kind of hostile for Ukrainians, where they're given language training, training on how to get a job.
He wanted to meet the people there to really highlights the fact that Poland is putting a huge amount of effort into supporting the refugees from Ukraine. And he's going to continue doing that tomorrow.
Also meeting the Ukrainian president to thank him really for Poland's efforts to support the people of Ukraine.
KEILAR: It's really amazing. I mean, in Poland, if you speak with people, they're just working in shops working in restaurants. Many of them will have had Ukrainians coming through who needed to be housed as they were moving from one place to another. And it sounds like he's really trying to highlight some of that work.
How do you see his role moving forward here?
FOSTER: Well, it's interesting, he is stepping up. You know, he's got a more senior royal role, hasn't he? Since the queen died, he's prince of Wales now. And he's really marking how he wants to carry that forward.
And as you say, here in Poland, it's amazing what they've done because they effectively given Ukrainians full access to public services, to schools and hospitals. I think he's been really taken by that.
And this was really a last-minute visit. He just said to his team, I want to go over there and see what they're doing and really thank them for it as a, you know, big figure in the West. So he's representing all of us, in his eyes.
So it's interesting seeing how he's really presenting himself on the global stage now that the queen is no longer here
Of course, we talked so much about the family ructions. We haven't had a chance to ask about that yet. But we'll wait to see whether or not tomorrow.
KEILAR: All right, we will wait to see.
Max, thank you so much for that report, live for us from Warsaw, Poland.
And we're following this breaking news out of Denver. Two high school faculty members shot and wounded. The alleged shooter, a student, still on the loose.
KEILAR: The Supreme Court is bellying up to the bench today to hear a trademark case pitting Tennessee whiskey against a dog toy.
Check this out. On the left, a bottle of Jack Daniels. And then, on the right, a squeaky toy called Bad Spaniels where you can see here what the toymaker is going for.
But the booze maker is not laughing. Its lawyers say Bad Daniels - Bad Spaniels, pardon me, "is likely to confuse consumers and harm Jack Daniel's brand, including by associating whiskey with excrement and toys that appeal to children."