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Interview With California Rep. Jim Costa On State's Severe Weather; Uman Missile Strike; Pope Francis In Hungary; Humanitarian Crisis In Sudan; U.S. Fed Releases Report On Bank Collapses; U.S. Budget Battle; Federal Reserve Chairman Pranked. Aired 5-6a ET

Aired April 29, 2023 - 05:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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KIM BRUNHUBER, CNN ANCHOR AND CORRESPONDENT (voice-over): Hello and welcome to all of you watching us here in the United States and Canada.

Ahead on CNN NEWSROOM, millions of people in the United States are starting their weekend under threat of severe storms. We'll look at where the risk is highest.

Plus the desperate search for survivors in Ukraine. We are at the scene of one deadly strike.

U.S. regulators say mismanagement and weak supervision led to the collapse of two banks. What dominoes could fall in the days ahead.

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UNIDENTIFIED MALE (voice-over): Live from CNN Center, this is CNN NEWSROOM with Kim Brunhuber.

BRUNHUBER: We begin this hour with extreme weather ahead for much of the country. More than 20 million people are under threat for severe storms across the Southeast. Two rounds of strong thunderstorms are expected to cross Florida and southern Georgia today, one this afternoon, the second overnight.

The main threats will be damaging wind, hail, tornadoes and water spouts with heavy rainfall. In Texas, dozens of severe weather reports Friday, reporting golf ball-sized hail.

A waterspout north of Miami meandered for several minutes but luckily never came ashore. Also a possible tornado in Palm Beach County. Also the Mississippi River continues to rise, flooding many communities around the banks. The river has already crested in some areas. Here is Adrienne Broaddus with the latest.

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ADRIENNE BROADDUS, CNN CORRESPONDENT: As the river level rises, anxiety is also going up for business owners here in Davenport, Iowa. You can see where the park benches are submerged.

That's a marker the embankment of the Mississippi River. You can see the water has overflowed, flooding this entire downtown area. Across the area, people are taking steps to mitigate the damage.

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CLAUDIA ANDERSON, MANAGER, THE PHOENIX: It's part of the downtime of Davenport. We flood all the time. And we -- I don't know. They won't put a flood wall up, thinking that everyone wants to look at the river. Well, we're tired of looking at the river. It's enough.

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BROADDUS: That was Claudia Anderson. She manages The Phoenix, a local restaurant. Her sump pumps are working overtime to remove water flooding into her business caused by the backed up sewer systems. Meanwhile, the river isn't expected to crest until Sunday or Monday -- Adrienne Broaddus, CNN, Davenport, Iowa.

(END VIDEOTAPE)

BRUNHUBER: Those in California are preparing for floods this weekend, as well. Parts of Yosemite National Park closed on Friday over flooding concerns. The park has remained closed until Wednesday but the closure could last longer.

State and local officials are also preparing for floods in the Tulare Lake Basin as snow melt starts. California Governor Gavin Newsom visited the lake Tuesday to find ways to divert the snow melt from the area.

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GOV. GAVIN NEWSOM (D-CA): You can look at a scene like this and think the worst is going to recede, that the worst is behind us, when, in fact, quite the contrary. Every day, you're seeing incremental half- inch, an inch of more water, new water, present itself here in this basin.

As a consequence, we not only need to maintain our vigilance but we can't be impatient in terms of the impending floods and the damage that will occur here.

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BRUNHUBER: Billions of dollars of agricultural products can be lost to flooding, according to California's Department of Food and Agriculture. California representatives are pushing for a disaster relief package to fight just that.

Earlier, I spoke with congressman Jim Costa of the House Agriculture Committee on how the severe weather could impact Americans' ability to put food on the table. Here it is.

(BEGIN VIDEO CLIP) REP. JIM COSTA (D-CA): California produces 98 percent of the processed tomatoes. You know, that's tomato sauce for pasta and for pizza and all those wonderful things we enjoy; 85 percent of the citrus.

And so we are still trying to determine how our navel oranges and mandarins have been impacted; 75 percent of the world's almonds, 50 percent of the world's pistachios, 20 percent of all the milk product for the United States is produced in California.

So we're the number one agricultural state, people tend to forget that, with over 300 crops that we grow.

[05:05:00]

COSTA: And so we're going to find that impact in the grocery store and in our favorite restaurants and fast food places.

We don't know what the totality of that's going to be yet at this time. We're trying to make a determination so that we can try to mitigate for those losses.

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BRUNHUBER: A race to save lives after a massive Russian missile strike in Ukraine. Rescuers are trying to reach two children who are believed to be trapped inside a building in Uman; 17 of the victims have already been rescued, which has partially collapsed. The strike left at least 23 people dead, including five children.

Two more people died in a separate attack in Dnipro. CNN's covering developments in Ukraine from all angles. Nic Robertson is standing by near the site while Salma Abdelaziz is in London, keeping an eye on Ukraine's expected counteroffensive.

Nic, watching your reporting, what's the latest on the race to save lives?

NIC ROBERTSON, CNN SENIOR DIPLOMATIC EDITOR: Yes, the recovery is still underway. I think this is more recovery than rescue at this stage. You can see them sort of peeking out between the floors here. They are clearing the rubble up there.

They are more than 30 hours into this operation, able to identify one more person last night.

I would ask David to pan across over here.

You see police officers, taking notes from people, whose apartments were destroyed, bringing together evidence, information that can be used later, potentially part of a war crimes investigation about everything that happened.

But this recovery and search mission has been underway for more than 30 hours.

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ROBERTSON (voice-over): Residents asleep as a Russian missile ripped through their apartments. Rescuers in this small central Ukrainian city, Uman, on the scene fast.

Serhyi was one of the first.

SERHYI ALEKSEEV, UMAN RESIDENT (through translator): There were terrible screams of children. The explosion was very powerful. The houses started to shake in the nearby areas. The first one we pulled out was a living woman who was put in the ambulance but she died in hospital.

ROBERTSON: The death toll climbing through the day. This lady telling us she heard the missile, put her kids in the bathtub and pillows over their heads and hoped they'd live.

Fighting back tears, she said so many children live here, a gaping concrete and rubble wound where those innocent lives shattered, the first missile strike in Uman since march last year.

Families and friends desperately awaiting news of loved ones. This lady telling us her friend on the eighth floor survived but the friend's two daughters, one 13 years old and the other, just 7, are still missing.

A firefighter takes us up to see those top floors. Onto the roof, nine floors above the recovery teams.

You can see how the building has literally collapsed down here. There should be building right out here and the floors pancaked down with the roof tipping over down there.

From here, the damage even more devastating than below. More than half the building's 46 apartments destroyed.

So the firefighters will come up here and as they've been doing all day in this dangerous mission here literally putting themselves in danger to try to recover, to clear out the site, to bring solace.

Ukrainian officials believe all this devastation caused by a single Russian Kh-101 stealth cruise missile. It is the single deadliest strike on civilians since January, 109 people registered living here. As night fell, many of them still unaccounted for.

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ROBERTSON: Officials aren't saying how many people they are still searching in the rubble for but a lot of people around here, neighbors say that they believe there are at least two children still stuck in the rubble up there.

Why this is taking so long, because each new floor that the firefighters get into, they have to pause because it potentially opens an air pocket to restart the fire. So this is not just as simple as going through rubble. There is a potential for fires to start again.

And everyone around here, I'm looking out around here, on tenterhooks about what they are going to find.

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BRUNHUBER: Yes, just tragic. Thanks for the excellent reporting there on the scene, Nic Robertson, I appreciate it.

To Salma Abdelaziz in London now.

While many eyes are on these Russian attacks, a lot of the focus is on the Ukrainian counteroffensive.

What is the latest?

SALMA ABDELAZIZ, CNN CORRESPONDENT: We have been talking about this for months. This anticipated spring offensive when Ukraine's forces would ramp up their attacks, their push along the eastern front line.

We did get an update from the defense minister, saying that the preparation for that counter offensive are coming to a close. NATO has been pouring support into Ukraine in recent months, coming in the form of dozens of tanks.

There has been this lightning speed preparation process if you will to get Ukrainian soldiers trained up on those tranks (sic) and trained up on those NATO weapons. But it may not be enough to start this counteroffensive for now.

Ukrainian officials admitting they are outmanned and outgunned by Russian forces. We have seen them struggle in Bakhmut. This is a quote from a senior adviser, speaking to Wolf Blitzer last night. Take a listen.

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IGOR ZHOVKVA, DEPUTY HEAD, OFFICE OF THE PRESIDENT OF UKRAINE: You need an artillery systems and enough ammunition to start the counter artillery battery fight before the counteroffensive and then you use your manpower.

And they need armored vehicles and tanks, Western type tanks, which we started to receive from the Western states, from the European states, but not in enough amount.

When we receive the weapon, we do not store them somewhere in the warehouses, whatever. We immediately use them on the battlefield. And, you know, Ukraine is withstanding for more than 14 months. And we're having hard times, say, in the east of Ukraine. We're defending each and every inch of Ukrainian territory.

So you cannot just tell, you know, I've provided you some percentage and you rest assured you will not get anything else. We need the weapon. With the intensity, Russians are attacking us. With the intensity, Russians are bombarding our cities. With intensity, Russia are firing our front line.

We need still more. And yes, we need artillery, we need Western tanks and armored vehicles. We need air defense systems.

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ABDELAZIZ: I think the message there from Ukraine is very clear: send us more weapons. We need more help. That is exactly what NATO have been doing. Some 98 percent of those vehicles promised, tanks promised, have made their way there. But Ukraine needing absolutely more.

That is what you heard from that official there. They also have to spread out across the country where places Uman are having these horrific missile strikes, where families are caught in the crossfire. Again, they are facing this conflict from every border of Ukraine.

BRUNHUBER: Thanks so much, Salma Abdelaziz, in London.

Meanwhile the man who started the war, Vladimir Putin, signed a decree on Thursday that allows the deportation of Ukrainian citizens from territories illegally annexed by Russia if they're deemed a, quote, "national security threat."

Residents from Kherson, Zaporizhzhya, Donetsk and Luhansk, who haven't taken Russian citizenship, will be recognized as foreigners and could be expelled. Ukrainians living in these areas without a Russian passport would have to apply for a residence permit, undergo fingerprint registration and provide documents translated into Russian.

A Ukrainian government adviser responded to the decree on Twitter, writing, quote, "The process of changing the ethnic composition of these territories, where Russians are being resettled, is taking place. It's an obvious manifestation of the genocidal nature of the war."

The U.S. State Department says it is, quote, "deeply disappointed" that a request to visit jailed American journalist Evan Gershkovich has been denied. Gershkovich, a reporter for "The Wall Street Journal," was detained in Russia a month ago on espionage charges.

Last week in a Moscow court, he was denied an appeal to change the terms of his detention. The State Department's request was denied by the Russian foreign ministry, which says it was in response to Washington not providing visas for Russian journalists.

But the State Department says it may take additional diplomatic steps to get access to Gershkovich and fellow American detainee, Paul Whelan.

Pope Francis has wrapped up a three day visit to Hungary, meeting with children, refugees and the poor. Migration is top of his agenda. On Friday, meeting with the prime minister Viktor Orban at the presidential palace. The pope urging the Hungarians to accept migrants and refugees. Orban

largely opposes accepting migrants and refugees from the Middle East and Africa. Hungary has also angered many in Europe for refusing to back military aid for Ukraine.

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BRUNHUBER: The pope quoted a letter by St. Stephen to emphasize his point to accept all migrants.

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POPE FRANCIS, PONTIFF, ROMAN CATHOLIC CHURCH (through translator): I urge you to show favor, not only to relations and kin or to the powerful and wealthy or to your neighbors and fellow country men but also to foreigners and all who come to you.

I urge you to welcome strangers and hold them in esteem so that they prefer to be with you, rather than elsewhere. That was St. Stephen.

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BRUNHUBER: Saudi Arabia is stepping up efforts to evacuate people from the fighting in Sudan. Next, we'll take to a ship on a mission to ferry refugees to safety.

Plus U.S. Republican House lawmakers will to raise the debt limit but the fight is not over, as long as the Democrats control the Senate. Please stay with us.

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BRUNHUBER: The latest cease-fire in Sudan is now marred with more reports of fighting. The army and the Rapid Support Forces accuse each other of violations. This is as the RSF says it now controls 90 percent of Khartoum state. Fighting has also increased in El Geneina Sudan's West Darfur region with reports of ethnic clashes.

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BRUNHUBER: Basic necessities like food, water and medicine are in short supply across the country. United Nations says more than 50,000 people have already fled to neighboring countries while thousands of others are unable to escape the fighting.

Larry Madowo is in Jeddah, as a Saudi Navy vessel appears to bring out more evacuees.

Let's begin with CNN's senior Africa editor, Stephanie Busari, who is live in Lagos.

What is the latest on the fighting and conditions for those who haven't been lucky enough to leave?

STEPHANIE BUSARI, CNN SENIOR AFRICA EDITOR: Yes, Kim. The fighting, another cease- fire broken; another day, another cease-fire not adhered to. Heavy fighting has been reported in the capital.

People are stuck; aid can't get in. In some places, people can't get out, mostly because some can't afford to. Some of these journeys are very, very dangerous. Like you said, 50,000 people have fled Sudan to places like Egypt.

We spoke to one woman who described the sheer horror and the terrible circumstances that people face making this journey. Take a listen to what she had to say.

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ROZAN AHMED, BRITISH SUDANESE AUTHOR AND ACTIVIST: I saw elderly people, who were just having to wait in the boiling hot heat for the process. There were so many people there. They couldn't lie down. They couldn't sit down. It just broke my heart that there wasn't any humanitarian assistance there, either.

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BUSARI: Yes, that is what people are asking.

Where is the humanitarian assistance?

They're asking if people can be taken out of the country, why can't aid, medical supplies and things like this come in?

Many aid agencies were forced to evacuate because of the heavy fighting. And hospitals are being looted so very few medical supplies or access to medical assistance as heavy fighting goes on with many people being wounded and killed in these attacks. So it really is a desperate situation all around for people in Sudan right now -- Kim.

BRUNHUBER: Thank you so much, Stephanie.

Over to Larry Madowo.

Larry, you are at the port of Jeddah. I see many people behind you.

Where exactly are you and why are you there?

LARRY MADOWO, CNN CORRESPONDENT: Kim, this is a commercial ship that just arrived here in the port of Jeddah. It appears to be bringing in the largest number of evacuees so far from Port Sudan. The exact numbers are unknown but it appears to be at least several hundred people on the ship.

It was chartered by the Saudi government, using their own warships from their navy. This is also a private charter that has come in here and appears to be carrying a lot more people.

So far the Saudis have brought in about 3,000 people from 80 nationalities. This, if the numbers check out, would almost double the number of evacuees that have been brought in from Port Sudan to here in Jeddah, then eventually to the other countries.

The Saudi minister of defense telling us there are several Iranians on the ship as well. There are a number of different nationalities from Sudan that have come out. There is a big refugee population of Syrians in Sudan as well. But people are from different nationalities and creeds and are all grateful to have made it here from the journey.

If they are coming from Khartoum, that is about 800 kilometers, more than 500 miles through some very dangerous territory. Many people have risked their life to get through convoys on buses that have tripled their rates where some of the worst fighting has been seen to the Red Sea.

And if they're lucky, they can get on a ship like this. What we are waiting for, they tell us people are coming out, the sick first. They have two ambulances from the Saudi Red Crescent authority that will take them in.

The rest are kind of waiting patiently, which if you already spent 12 hours, what is a couple more minutes until you can finally get to safety?

Hopefully, they eventually get to where they are going.

BRUNHUBER: Yes, such a precarious journey. As you point out, those people are the lucky ones. Larry Madowo, thank you so much.

From layoffs to a slowdown in consumer spending.

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BRUNHUBER: Just ahead, what that could mean for the economic outlook. Stay with us.

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BRUNHUBER: Welcome back to all of you watching here in the United States, Canada and all around the world. I'm Kim Brunhuber. This is CNN NEWSROOM.

First Republic Bank could be in worse trouble. Its stock plummeted about 40 percent on Friday. It follows a disappointing first quarter earnings report on Monday, which in turn fanned Wall Street's fears of a banking crisis.

The White House has snuffed out any hopes of government intervention. This all comes just a month after the collapse of Silicon Valley Bank and the shutdown of New York-based Signature Bank.

U.S. regulators are revealing the results of their investigation into the failure of those banks. The Federal Reserve says poor management is part of the reason why Signature Bank collapsed. And it was also affected by Silicon Valley Bank's failure just days before.

The report pointed to management shortcomings and to some of its own. CNN's Rahel Solomon has the story.

(BEGIN VIDEOTAPE)

RAHEL SOLOMON, CNN CORRESPONDENT: The report thorough, more than 100 pages, its findings damning, a textbook case of bank mismanagement, it reads. The Federal Reserve releasing its highly appeared self- assessment, a post mortem, if you will, on the collapse of Silicon Valley Bank on March 10.

The Fed's vice chair of supervision writing a letter that accompanied the report.

Bank senior leadership failed to manage basic interest rate and liquidity risk. Its board of directors failed to oversee senior leadership accountable.

[05:30:00]

SOLOMON: And Federal Reserve supervisors failed to take forceful enough action. In other words, this was a failure at every levels.

But we already knew that the Fed was aware of some of SVB's problems. According to recent testimony, more than a year before the bank fell, Fed supervisors began raising red flags.

So why couldn't they prevent SVB's demise?

Well, the report says that supervisors delayed action to gather more evidence, even as weaknesses were clear and growing. And this meant that supervisors did not force SVB to fix its problems, even as those problems worsened.

The report also acknowledging that it's time for the Fed to reconsider how it evaluates some banks, saying, quote, "We need to evaluate how to ensure that supervision intensifies at the right pace as a firm grows in size or complexity."

So what now?

Well, Derek Tang, the CEO and co-founder of Monetary Policy Analytics, he tells me, "I think they'll be a little bit more holistic as to looking at broadening the scope of what they look at, from financial metrics, such as cash levels and the composition of their deposits to more qualitative metrics about the character of the bank."

As for the larger banking system, the report said SVB was an outlier and, quote, "Our banking system is sound and resilient" -- Rahel Solomon, CNN, New York.

(END VIDEOTAPE) BRUNHUBER: Staying on the financial front, the Fed's favorite

inflation measure cooled further in March, a sign the bank's rate hike campaign is taking hold. According to new data released Friday by the Commerce Department, PCE Price index rose 4.2 percent for the 12 months ending in March.

The Federal Reserve expected to meet this week to look at the rate decisions for 2023.

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BRUNHUBER: Ryan Patel is a senior fellow at Drucker School of Management at Claremont Graduate University and joins me now from Los Angeles.

Thank you so much for being here with us. Listen, I want to start with the banking front. I mean, you have been warning about more cards potentially falling for a while now.

How worrying is this?

Should the Biden administration be doing more to step in here?

RYAN PATEL, GLOBAL BUSINESS EXECUTIVE: Yes, this -- you and I have talked about this. Unfortunately, turmoil was coming and this was a domino effect. First Republic had gotten bailed out yet, still we are in the situation where the FDIC is stepping in, which is a big deal.

Behind the scenes, they are trying to figure out, not just the Biden administration but the Federal Reserve and FDIC, everyone is trying to figure out if it is an option to have another bank buy them. But it is just not looking very great. Maybe the FDIC have to hold it a little while longer, then start selling the parts.

There is the good news, if there is any good news, there will be further regulations moving forward. That is a conversation that was coming out with the other report of what happened a month ago with Silicon Valley Bank and others. We will see more tied to regulations, more the ability to make sure this doesn't happen again.

BRUNHUBER: I just want to ask about the future here.

Is there more trouble still to come?

PATEL: You're always setting me up. You told me last time there was good news, I warned you about this stuff.

BRUNHUBER: You did predict it.

PATEL: Actually this was the big domino.

Do I think there will be other failures?

I think there will be. With this magnitude, a top 16 bank in the U.S., it is still a big deal. We will see that bad management, no matter where you are, will lead to bad and poor results. It is not really indicative to the banking industry per se but into

how people are managing their business. I think in the U.S., don't be shocked or surprised if we still see more fallout of the UBS and Credit Suisse. I'm not trying to predict more bad news. I don't want to be in that business. But I do see the more turmoil in different places.

BRUNHUBER: You talked about regulation coming out of this. You referenced the regulatory reviews that happened on the other two bank failures.

What were the key takeaways?

What did we learn?

PATEL: Here's my key point. What they said, yes, social media played an aspect. Yes, the Fed should have done more or, more importantly, reacted faster.

Let me just hit this right on top of the head. It was the management. It was the bank management not doing what it was supposed to do, not managing the risks, not analyzing the risks.

I know sometimes, that can get lost in conversations. But that is where it starts. Everything else played a factor to it. But it starts there. Silicon Valley Bank for example had the largest deposit in 2021.

[05:35:00]

PATEL: What do you do?

You do the same thing and invest in the same places, it doesn't make any sense, no matter what industry. Good governance, boards matter in these conversations and being able to push back on the executive team.

Yes, the report did say multiple factors played into it. But it was clear, it starts with the leadership team.

BRUNHUBER: Then on the economy more broadly, we got lower than expected growth numbers earlier this week and then more economic numbers coming out yesterday, especially to do with inflation.

PATEL: To me, it was the consumer spending. What we saw, in the last month, it started to slow down.

Why is that important?

Because consumers are spending less. This type of news and the way the market reacts in general, it does make an effect, because of cost of living rises, as well. It makes an effect because they will stop spending.

You know, the growth numbers are still 1.1 percent year-over-year. Still great, we will maybe not hit at 2 percent that economists are looking at. But that is part of this whole puzzle. Back to the interest rates, the Fed also said, make sure it is clear,

regardless of where the economy is, they are still looking to fight inflation. It still may increase interest rates, no matter where they are, where they think they need to be.

BRUNHUBER: Last 30 seconds, big picture, tell the folks what this means.

Are we talking recession here?

PATEL: You know, it seems like we are heading that way. Again, I hope I'm wrong. With all of this coming through, you know, a mild recession, we have seen in the last week there have been great earning reports from some companies. But you do see the layoffs occurring.

You see companies starting to hold investments and then you see consumers starting to slow down. It does have that recipe that you will go into that type of recession and you get news like this, where banks entrust you to question these things.

We see more saving rates being higher, more cash on the sideline. The economy will slow down just a little and it can contribute to that later during the year.

BRUNHUBER: It is always great to check in with you, check the pulse of the economy. Thank you so much. Appreciate it.

PATEL: Thank you.

(END VIDEOTAPE)

BRUNHUBER: Some U.S. lawmakers are calling for dialogue between the White House and Capitol Hill to resolve the impasse over raising the debt limit. House Republicans voted to raise it for a year in return for spending cuts that would gut President Biden's domestic agenda. Manu Raju has the story from Washington.

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MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: House Republicans earlier in the week passed a bill to raise the national debt limit by the narrowest of margins. And after four Republicans voted against it, they approved it with 217 votes in the House, barely getting it through.

But that has not necessarily changed the dynamics here on Capitol Hill, because Democrats in the Senate, the Democratic leader in the Senate, the House Democratic leader, Hakeem Jeffries, as well as the President of the United States.

All are saying they will not negotiate any sort of debt ceiling increase with House Republicans, saying simply they should raise the debt limit without any conditions, without any spending cuts because of the fact that the full faith and credit of the United States economy is on the line here and raise the debt limit without any conditions, they say. But that is a position that is strenuously opposed by the Republican

leaders and the Republicans in the Senate, including Senate Republican Mitt Romney, who is known to have cut deals in the past but says, this time, it's the White House that should be cutting a deal with the House GOP.

(BEGIN VIDEO CLIP)

SEN. MITT ROMNEY (R-UT): The House has acted; Republicans, we, in the Senate, stand with the House. We have our point of view. Time for the President to step in and say, what's his point of view and do a deal, work together.

RAJU: Do you think that it's time for the White House to sit down with McCarthy, try to get a deal on the debt limit, actually have a meeting with Biden and McCarthy on this?

SEN. MARTIN HEINRICH (D-NM): I think that, you know, we're at a place where the President has put out his budget. We now have a counteroffer. We have to raise the debt limit. And I think the dialogue should be constructive among all of us.

(END VIDEO CLIP)

RAJU: That last comment from Martin Heinrich, a Democrat from New Mexico, one of a number of Democrats, who say there should be some sort of dialogue.

Jared Golden of Maine told me earlier in the day that the president should sit down with the Speaker of the House. They should try to find a compromise, given the House Republicans put out a plan, they passed a bill. They may not like it but they should still try to find some sort of resolution.

[05:40:00]

RAJU: But whether that actually happens remains to be seen. Kevin McCarthy told me earlier in the day he has not yet heard from the White House on this issue. When he will, it remains to be seen. And the possibility of a first debt default could occur potentially as early as July, according to some estimates.

We don't know the exact timeframe yet but that is not a whole lot of time, because Congress will have to cut a deal, if they are to get one; try to go through both chambers of Congress. All of that will take a significant amount of time and effort.

And right now no talks are happening ahead of what could be the first ever debt default and a potential economic disaster coming in just a matter of weeks -- Manu Raju, CNN, Capitol Hill.

(END VIDEOTAPE)

BRUNHUBER: Still ahead, one of the most powerful men in Washington is duped by infamous Russian pranksters. What the Federal Reserve is saying -- coming up. (MUSIC PLAYING)

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BRUNHUBER: President Biden is making his first big fundraising push since officially launching his re-election campaign earlier this week. He met with more than 100 of his biggest donors at a Washington hotel.

He told attendees, quote, "We need you. Our democracy needs you because this is about our freedoms. MAGA Republicans are trying to take us backwards. But together, we are not going to let them do it."

The U.S. Federal Reserve chairman Jerome Powell thought he was talking to Volodymyr Zelenskyy earlier this year. But it was a Russian prank.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So how do you assess the policy of the central bank of Russia, for example?

So they managed to save the ruble.

Why?

JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: So I should say that, in our system, in our governmental system, it is really the administration, which is to say we are not part of the administration. We are an independent central bank.

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[05:45:00]

BRUNHUBER: A Fed spokesperson acknowledged the incident, saying Powell participated in a conversation with someone who misrepresented himself as the Ukrainian president. But the spokesperson knows the clip had been edited and couldn't confirm its authenticity. It has been referred to law enforcement.

More now from CNN's Matthew Chance.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: This is something that these two Russian comedians, they do quite a lot. Vovan and Lexus is what their sort of like show names are. It's what they call themselves.

And they routinely pose as world leaders or prominent figures and then call other world leaders and other prominent figures and have these conversations, which are not necessarily hilarious but they are meant I think to be as sort of an approximation of the kind of conversation you'd expect those two leaders to have, as a way of sort of getting into public what, otherwise, you know, isn't made public. And when it comes to Jerome Powell, the chairman of the U.S. Federal

Reserve, they were talking to him about the U.S. economy, about the interest rate rises in the country. He was talking about how the economy could fall into recession or at least experience very slow growth.

They also tried to draw him on his assessment of the Russian central bank, given how many sanctions have been imposed against the country. Now to his credit, he didn't, in the clips that I've heard, actually say anything that was sort of, you know, particularly, you know, inappropriate or anything like that.

In fact, the Federal Reserve has released a statement saying that, no, you know, sensitive or confidential information was discussed. But nevertheless, you know, the fact that, you know, what Jerome Powell believed was a private conversation has now been made public, they're not going to be happy about that.

Remember, you know, every time this figure says anything in public, it could potentially move the markets. I don't think it has on this occasion but, you know, that's why he's so tightlipped about economic matters.

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BRUNHUBER: All right, still ahead, the battle on the court is heating up. The NBA playoffs inch closer to the finals. All of the highlights coming up. Please stay with us.

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BRUNHUBER: The U.K. is getting ready for a very big day, the coronation of King Charles III now only a week away. The palace just released new portraits of King Charles and Queen Camilla.

The photographs were taken last month in the blue drawing room at Buckingham Palace. Charles and Camilla sitting in chairs dating back to the 1800s.

And the Stone of Destiny is on its way from Edinburgh Castle to Westminster Abbey. The stone is an ancient symbol of Scotland and has been used in coronations for centuries.

Be sure to watch special live coverage of the coronation of King Charles III next Saturday May 6th, starts at 5:00 am in New York, 10:00 am in London here on CNN.

That is all for me. I am Kim Brunhuber. Thank you for joining us on CNN NEWSROOM. For viewers in North America, CNN THIS MORNING is next. For the rest of the world, it's (INAUDIBLE).