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Hundreds of Migrants Missing in a Greek Shipwreck Disaster; Millions of Indians and Pakistanis Bracing for Cyclone Biparjoy; More than 100 People Dead in a Wedding Capsized Boat Disaster in Nigeria; Fed Interest Rate On Pause; U.S. Secretary of State Visits Beijing; Young Prince Charles Drawings Up for Auction. Aired 3-4a ET
Aired June 15, 2023 - 03:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[03:00:00]
(COMMERCIAL BREAK)
ANNA COREN, CNN ANCHOR AND CORRESPONDENT: Hello and welcome to our viewers joining us from all around the world. I'm Anna Coren, live from Hong Kong.
Just ahead on "CNN Newsroom."
(BEGIN VIDEO CLIP)
UNKNOWN: We cannot afford any more losing lives in the sea.
(END VIDEO CLIP)
COREN: We're live in Greece with the latest on the deadly migrant shipwreck at sea in what could be one of the worst maritime disasters in the region in years.
Plus Russia is stepping up its attacks on key areas across Ukraine. This as Kyiv is claiming some success in its counter-offensive against Russian forces.
And the U.S. Secretary of State heads to Beijing this weekend for a long-delayed visit aimed at cooling tensions between the US and China. We'll have a live preview of his trip.
Well, Greece has declared three-days of national mourning for hundreds of migrants who have feared drowned after their boat sank early Wednesday off the Greek coast.
It's one of the country's worst maritime tragedies in years, with at least 78 people confirmed dead so far. Just over 100 have been rescued. The boat is believed to have left Libya and was trying to reach Italy. The first distress call went out Tuesday and the last known contact was shortly after midnight on Wednesday morning.
(BEGIN VIDEO CLIP)
YANNIS KARVELIS, REGIONAL HEALTH DIRECTOR (through translator): It is indeed a tragic situation, a very difficult situation with a very large number of shipwrecked people, a number that I think we have not faced in the past to such an extent and volume.
(END VIDEO CLIP)
COREN: Well, the Greek Coast Guard provided these aerial photos of the overcrowded vessel on Tuesday. It's unclear exactly how many people were on board, but estimates range from 400 to 750 men, women and children.
Well, Journalist Elinda Labropoulou joins us now from Kalamata in Greece. Elinda, what is the latest information you have on the search and rescue operation?
ELINDA LABROPOULOU, JOURNALIST: Well, unfortunately, Anna, there are no news of any new survival. So at the moment, we're still at 78 confirmed dead and 104 who have been rescued. Most of them are at this warehouse right behind me. We're at the port of Kalamata where ambulances are coming in and out, as well as volunteers and other forms of assistance.
We've been talking to the Red Cross and others who are here, who are telling us that the people inside are in great need of psychological help right now.
And many of them don't actually know what has happened. They were on board this ship with others that they can no longer find.
In the early morning hours, a number of body bags were carried to the port and now have been taken further in order to be identified properly. We understand that relatives of people are also coming in looking for loved ones.
This is certainly one of the biggest tragedies of this kind that we've had in Greece. And Greece is no stranger to having migrant wrecks in the last years. It's been the country that's been at the very front of a refugee and migrant crisis since 2015 when over a million people crossed into Europe via Greece.
However, in the last years, it seems to be the case that this Libya to Italy route has become increasingly popular. And on this wreck, we understand that from the rescued people that we have now, and we have the first indications of nationalities on board. We understand that there were many Egyptians, some Syrians, and some Pakistanis at least.
Also we understand that there were women and children on board as well. This is from what those who have been rescued have said, but so far none of them are among the survivors.
Now, what is really crucial here is that this incident took place at one of the deepest parts of the Mediterranean. And it seems to be the case that once the ship capsized, we do not know exactly why that happened.
[03:05:00] Yet authorities here have been saying that the shift in weight is what led to its capsizing, but it's not clear if this is because of some sort of panic, because of mechanical damage or some other reason, but it seems to be the case that a lot of people were on lower decks at the time.
So having sank in such great depth, it's very difficult for any kind of operations to take place there, Anna.
COREN: Yeah, Elinda, I understand that the Greek Coast Guard was aware of this vessel before it capsized because of the, I guess, irregular hazard movements that were going on. What have authorities told you about what led to this tragedy, the information they can share?
LABROPOULOU: Well, what they are saying at the moment is that they have been following this boat, they had received from one of the NGO's a distress alarm. They knew that there were some issues on the boat, but when they asked the boat for help-if-whether they wanted help, they said they didn't.
This is because, obviously, they were trying to get to Italy. But we have some conflicting reports right now as to exactly what happened and when these first distress signals went in. What we do know from the Greek authorities is that the boat is likely to have sunk around 1:40am, so very late at night, and that it took about 10 to 15 minutes to do so.
What we're being told, but this is very much initial report surfacing, is that among those rescued we may have some of the people smugglers on board. There are investigations underway, and hopefully we'll know more on that soon, Anna.
COREN: Yeah, those images released by the Greek Coast Guard, truly staggering how many people were packed on that vessel, just goes to show the level of desperation. Elinda Labropoulou, we certainly appreciate your reporting from the scene there in Kalamata. Many thanks to you.
Well, Russian forces are putting up a fierce fight in the early stages of Ukraine's counteroffensive. Ukrainian officials say they are taking both offensive and defensive positions, as Russia uses shells, air strikes and mines to try to stop their progress.
Despite those difficulties on the battlefield, Ukraine says its troops are advancing slowly, but surely in the east and south.
And this video, exclusive to Reuters news agency, shows a village in the Donetsk region nearly-liberated from Russian forces. Every building is damaged but all the Russians are gone.
As we see this visual evidence of Ukraine's counter-offensive progress NATO's Secretary General warns it's still early days.
(BEGIN VIDEO CLIP)
JENS STOLTENBERG, NATO SECRETARY GENERAL: We meet as Ukraine is conducting a major counteroffensive. It is still early days and we do not know if this will be a turning point of the war. But we see that the Ukrainians are making advances and liberating more land.
(END VIDEO CLIP)
COREN: Small, hastily organized groups of Ukrainian fighters were instrumental in blunting the original Russian invasion to seize Kyiv. Well now those soldiers have evolved into a critical component of Ukraine's strategy to push the Russians out of the country.
CNN's Sam Kiley spoke exclusively with a Ukrainian special ops team in Bakhmut on their efforts to tame Russian troops. Here's his report.
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SAM KILEY, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): A special forces night operation. The objective, to bring a special kind of misery to Russian troops.
As they arrived alongside Ukrainian regulars, the Russians attacked.
A night-vision recording of a routine assault that the special forces needed to shrug off.
(on-camera): How long did you spend under fire like this before you could move?
BRABUS, UKRAINIAN SPECIAL INTELLIGENCE OPS (translated): The attack lasted about half an hour.
KILEY (on-camera): And then what did you do?
BRABUS (translated): After that, we took up an observation position -- and we watched them -- we got to work.
KILEY (voice-over): Electronic surveillance pinpointed their victims. First, they killed two paratroopers approaching on their left flank to get to the group's main targets, Russian commanders near Bakhmut, a sterile record of an all-too-gritty event in March.
First, one officer is shot, then another down.
He says radio intercepts revealed that the Russians lost two officers and five others to their sniper team that night.
BRABUS (translated): The result of our operation was the demoralization of the Russian airborne unit because they lost their top leader.
[03:10:03]
KILEY (voice-over): Formed when Russia invaded Ukraine last year, this team of experienced veterans works in a secret realm under the intelligence services.
They're tasked with tactical work seeking strategic effect as Ukraine's counter-offensive takes shape.
Here, using a modified heavy machine gun in a hidden bunker last month close to Bakhmut.
Drone operators more than a mile away are directing Brabus onto Russian troops.
(on-camera): How many Russians have you killed in this war?
BRABUS: A lot of. A lot of. A lot of. For example, here's a lot of Russians.
KILEY (on-camera): This is when you're on the... This gun. How many more or less there?
BRABUS: I don't know. We didn't calculate, understand.
KILEY (voice-over): It's the Russians they want to do the counting, because Ukraine's best hope is that Russian troops run rather than fight.
Sam Kiley, CNN, in eastern Ukraine.
(END VIDEOTAPE)
COREN: Ukraine's allies are about to discuss their next steps in helping Kyiv's military efforts. NATO defense ministers are gathering in Brussels where they're set to hold talks this morning. A short time ago, U.S. defense secretary Lloyd Austin met with his Ukrainian counterpart. The gathering will also include a meeting of the Ukraine Defence Contact Group which provides military aid to Kyiv. Austin is set to deliver the opening remarks at that meeting.
For more, Salma Abdelaziz joins us live from London. And Salma, this is obviously a very critical time for the US Defense Secretary to be visiting NATO headquarters. Tell us more.
SALMA ABDELAZIZ, CNN CORRESPONDENT: Absolutely. And we're expecting those opening remarks any moment now from the U.S. Secretary of Defense, who is, of course, in Brussels, to host this meeting that is taking place, as you said, just as Ukraine announces begins its counteroffensive.
Now, President Zelenskyy made this declaration that it had begun just a few days ago. It was done in a rather muted way. I think partially to remind its partners, Ukraine, to remind its partners that they have long been the Ukrainian military softening Russian targets.
But on those front lines along Bakhmut and south of Zaporizhzhia, there is intense fighting underway.
The head of NATO, NATO Chief Jens Stoltenberg, already gave a comment to reporters on how he thinks that battle is going. Take a listen.
(BEGIN VIDEO CLIP) STOLTENBERG: Ukraine has launched a counter-offensive. What we see is fierce fighting. It's still early days. But we also see that the Ukrainians are making gains and that Ukraine is able to liberate occupied land. The support NATO Allies have been giving to Ukraine now for many, many months actually makes a difference on the battlefield as we speak.
(END VIDEO CLIP)
ABDELAZIZ: Now the NATO Secretary General made those comments just a few moments ago. He speaks about gains on the ground and indeed that is what Ukrainian officials are claiming. Very modest gains, Anna.
And just to put this in perspective, they're claiming that in the last few days they've gained about one square kilometer of territory, one square mile rather, of territory to the south of Zaporizhzhia and they've been able to push just a few hundred meters into Bakhmut, an area of course where Russia has claimed victory.
The key here for these NATO defense ministers who are going to be meeting today and tomorrow is to try to provide that support to Ukraine, but they're also going to need to see that reciprocated. They want to see some major gains on the ground.
They really want to see this shift on those front lines very quickly, because you have to remember, billions of dollars have been poured into this fight. These defense ministers are going to go back home and be held to account for where that money has gone.
COREN: A very good point, Salma, because they are yet to penetrate those Russian defensive lines. Tell us what more are you learning about the Russian soldier surrendering to the Ukrainian drone on the battlefield in Bakhmut?
ABDELAZIZ: So this was rather dramatic drone footage that we have just a short clip to play you that was released last month.
Now I have to provide you with a few caveats here. This was footage that came to CNN and edited. We did not see the raw version. It did have music added to it and it does take place in May in Bakhmut as we understand. You see this Russian soldier crawling around in the trenches of one of the fiercest battles in Ukraine.
He is trying to surrender to Ukrainian forces via drone. He signals to that drone. He's handed a sheet of paper from the drone operator who tells that Russian soldier essentially to follow those trenches, follow those front lines. If you continue to watch that footage, you can see him dodging what looks to be Russian artillery until he makes it to the Ukrainian position.
[03:15:07]
Now we understand the "Wall Street Journal" has been able to speak to the Russian soldier that you see in that video in custody, in Ukrainian custody. Of course, he was under prison guard during this interview, so unclear if he was under duress, but he does express that he was drafted into the Russian military, that it was not that he found himself shoved onto those front lines, told that he either has to fight or be shot. Ukrainian forces saying they were moments away from shooting this Russian soldier dead until he raised his hand and surrendered, and they took pity on him. Anna.
COREN: Extraordinary footage. Salma Abdelaziz, good to see you. Thanks for the update.
According to a new report from "The Washington Post," Donald Trump had the chance to try to negotiate a settlement in the classified documents case that might have kept him from being charged.
Three sources briefed on the matter tell the newspaper that one of the former U.S. president's lawyers pushed for that possible exit ramp last year.
However, CNN spoke to sources close to Trump's legal team, who are casting doubt on whether there was any real opportunity to cut a deal, since what was listed in the indictment predates when that lawyer joined Trump's team last August.
Trump has now been hit with 37 felony counts, to which he pleaded not guilty in federal court on Tuesday.
Well, meanwhile, the Trump team has been fundraising off the indictment. His campaign says it's raised $7 million since last week. CNN's Evan Perez explains the next steps in the case.
(BEGIN VIDEOTAPE)
EVAN PEREZ, CNN SR. U.S. JUSTICE CORRESPONDENT: The federal case against former President Donald Trump now moves to the trial phase in front of Judge Eileen Cannon, a judge that the former president appointed to the bench. Walt Nauta, his co-defendant, faces arraignment in another two weeks. And then the former president will start getting some of the discovery. His lawyers will need to see some of the evidence that prosecutors say they have against him to prove their case.
These documents, of course, have national security importance. And so that's one of the first things that prosecutors will need to do is to help get security clearances for the former president's legal team. Of course, he's still looking for lawyers to represent him in this case here in the Southern District of Florida.
Judge Cannon is new to the bench. She was appointed by the former president near the end of his term.
And according to the "New York Times" in a search of Bloomberg Law databases, she's had 224 cases assigned to her; only four of those cases have gone to trial for a total of 14 days. We know the prosecutors are looking to present their case in about a month. So that is a lot more days of trial than the judge has ever had to face.
Evan Perez, CNN, Miami.
(END VIDEO CLIP)
COREN: Joining me now is Michael Genovese, political analyst and president of the Global Policy Institute at Loyola Marymount University. He's also the author of "The Modern Presidency, Six Debates That Define the Institution."
Michael, great to have you with us.
MICHAEL GENOVESE, POLITICAL ANALYST: Thank you, Anna.
CORREN: Let's start with the report in "The Washington Post" that Trump rejected his legal team's suggestion they approach the Justice Department about a settlement that would preclude charges. His attorney reportedly said to, quote, "Take the temperature down". And it's not surprising that Trump didn't go for this considering his combative style, but if he had listened to his lawyers perhaps he wouldn't be in this mess.
GENOVESE: I'm not sure that that's the case. I think that it might have helped him a little bit, but I think that the case against him is so strong that all the cards are held by the government and Donald Trump has a very weak hand to play.
And in that sense, I think he felt a great deal of fear that they really had a lot on him. And so he wants to fight a battle. He wants to get into a war. And even if he loses the legal case, he wants to try to win the political case.
COREN: Do you think that if Trump had cooperated with the Justice Department, in his mind it would have been an admission of guilt?
GENOVESE: Oh, yes, he can't even give you an inch. Donald Trump is an ego that's the size of a basketball. He's really got a sense in which he knows it all. Everyone's out to get him. He is immune from prosecution. He can do it all. He said that in many respects about his power as president, even though it defied the constitution and the rule of law.
So I don't think he's ready to compromise. I don't think he wants to bargain. I don't think he'll give an inch.
[03:20:00]
COREN: There is a lot of discussion as to whether Trump's personal aide, Walt Nauta, will flip. The 40-year-old he's been charged with conspiring with Trump to hide classified documents from the government. I mean, what are the chances the prosecution will get to him?
GENOVESE: I think slim to none. Donald Trump is aware of this, the possibility he's seen Michael Cohn turn and he doesn't want another one to turn, especially an insider who knows a lot. I think what Donald Trump did the other night when he invited him to dinner with the family and with everyone was a sign of trying to embrace him and keep him in the family. And it's really hard to turn on a former president of the United
States. They've been together for years. He's very, very loyal to Donald Trump.
And so I think that trying to get him to flip is probably it may be a waste of time.
COREN: Michael, there is genuine concern surfacing about the trial judge, 42-year old Judge Aileen Cannon. She's a Trump-appointee from 2020. She's made favorable rulings to Trump last year, which were later overturned by the Circuit Court. She's also had very little trial experience. Do you believe that she's up to the job to preside over such a complex and high profile case?
GENOVESE: There are a couple of red flags here, and this is such a big ticket case that you don't want someone with so little experience, even though she's been on the bench a few years, she's tried very few cases and has very, in fact, no experience in national security cases. She also looked like she had her thumb on the scales in the last Trump case.
And so I think for everyone's sake, including her own, it might be best to give it to a more experienced jurist, someone who knows the ropes, who's been through the mill, who knows national security law because this is going to set some precedence and you don't want someone who is overturned on a higher court later.
COREN: Under federal law, Michael, judges are supposed to recuse themselves if their, quote, "impartiality might reasonably be questioned." I mean, it is being questioned by Democrats, by members of the legal fraternity, you know, among many folks out there.
But what is the likelihood of her recusing herself or special prosecutor Jack Smith requesting that she be recused?
GENOVESE: I think it's more likely that Jack Smith would do so. Republican justices, especially Supreme Court justices, have set a term in which they don't have to recuse themselves. They can be very involved in a case and say, well, I'm going to be unbiased. I won't recuse myself. Clarence Thomas is a perfect example of that. And so the groundwork has been laid for her to stay on if she wants to.
Recusing is a voluntary process. And while she did take a lot of heat for her previous decisions on the Trump case, you have to remember she's also going to be on the spotlight, so she may want to say, well, maybe I should play it straight and not put my thumb on the scale this time because my reputation is also on the line.
So I don't know if she's a good choice or not, but there are so many red flags that I think it'd be best for everyone if she recused herself or was removed.
COREN: Yes, she's being highly scrutinized right now. And as you say, if she takes on the job and is the trial judge, everybody will be watching. Michael Genovese, great to speak to you. Thank you, as always, for your insight and perspective. GENOVESE: Thank you, Anna.
COREN: Well, right now millions of people across India and Pakistan are bracing for a slow-moving cyclone. It's expected to bring heavy rain and flooding. The storm's path and forecast, next.
Plus a joyous day turned tragic, after a boat carrying a wedding party capsized in Nigeria.
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[03:25:00]
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COREN: The wind is picking up along India's northwest coastline as a slow moving cyclone inches closer. Right now millions of people across India and Pakistan are in the path of the dangerous storm set to make landfall in the coming hours.
More than 130,000 people across the region have been evacuated, not taking any chances with this storm which has weakened a bit and now equivalent to a strong Atlantic tropical storm.
CNN's Chad Myers has the latest forecast.
(BEGIN VIDEOTAPE)
CHAD MYERS, CNN METEOROLOGIST: Seems like we've been talking about this storm for a week. Tropical storm Biparjoy, barely hanging on to its cyclone category here, a long and winding road in the water, finally moving to the north, but moving so very slowly.
Now that's a good thing in the water, and especially because there's so much dry air to the north that it's not getting any stronger. That slow motion, that slow movement will be a bad thing when it comes on shore and makes very heavy rainfall. And I do believe that that's probably the biggest threat with this would be that inland freshwater flash flooding, rainfall flash flooding.
We're going to see tremendous amounts of rain due to the slow nature of the storm. Even 36 hours, it's barely on shore, maybe by 100 kilometers or 60 miles on shore. So still raining very, very heavily. Yes, there'll be some wind, but that's not the main threat.
The main threat with this will be a little bit of surge 2 to 3 meters along the immediate coast. But then as it gets inland, all of this will rain out. The storm are just going to sit over the same place for hours and hours and hours. So certainly, 8 to 12 inches of rainfall, over 250 millimeters if you do it in metric, that's where the heaviest rainfall will be, and that's where the biggest threat will be with this storm.
It's been a slow mover, and it continues to be a slow mover. The good news is there was enough dry air to the north to make this not a big storm.
(END VIDEOTAPE)
COREN: Chad Myers reporting there.
More than 100 people are dead in Nigeria after a boat carrying a wedding party capsized on Monday. Almost 150 people were rescued and police say they will be reunited with their families.
CNN's Stephanie Busari has the details.
(BEGIN VIDEOTAPE)
STEPHANIE BUSARI, CNN AFRICA SR. EDITOR: Scenes of celebration turned to tragedy as more than 100 people died in a boating accident in the early hours of Monday after a wedding party in north-central Nigeria.
Police say 106 of around 250 passengers drowned when their boat capsized on the River Niger, West Africa's largest river. 144 passengers were rescued and are receiving treatment, authorities said.
A local chief, Abdul Gana Lukpada, told CNN that the wedding guests were stranded after heavy rains flooded the roads and guests were forced to board the overcrowded vessel.
It is common for boats in these parts to carry large numbers of passengers beyond their usual capacity and life jackets are rarely worn.
The accident happened between 3am and 4am on Monday when visibility would have been poor and hit a tree trunk, the chief told CNN. He described it as, quote, "a big tragedy" and added he had lost four of his neighbors. It is unclear whether the bride and groom were among the passengers on the boat.
Nigeria is at the height of the rainy season, and the country's meteorological agency has warned of heavy rains that could trigger floods, and these floods are devastating to remote communities.
Boat accidents are also common in this part of the country, and last month, at least 15 people died after a boat capsized in northwestern Sokoto State.
Stephanie Busari, CNN, Lagos.
(END VIDEOTAPE)
COREN: Thick blooms of noxious smoke from dozens of wildfires in Canada are once again billowing across the United States border, compromising the air quality for millions.
[03:30:00]
COREN: The entire state of Minnesota and almost all of Wisconsin are currently under air quality alerts as the gray haze drifts south. Parts of Canada also saw moderate health risk Wednesday. Smoke from more than 60 wildfires across Ontario could be detected as far south as the state of Kentucky.
Conditions for the region should begin improving late this morning, but the poor air quality will linger through Friday as it takes time for the smoke to dissipate.
More than 45 million people from Colorado to Florida are under threat of severe weather today. That's after more than 300 storm reports across the South on Wednesday, including at least 10 tornadoes, six of those in Georgia.
Well, that's where this video was taken. At one point on Wednesday, more than 4 million people were under tornado watches in the southeastern U.S. At last report, close to 140,000 homes and businesses were still without power.
If you have a credit card or adjustable mortgage or auto loan, you can relax at least for another few weeks. The U.S. Federal Reserve is holding interest rates just where they are. We'll explain why.
Plus U.S. Secretary of State Antony Blinken announces a long delayed visit to China when he's going and what he hopes to accomplish. Just ahead.
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COREN: Welcome back to our viewers around the world. I'm Anna Coren, live from Hong Kong. This is "CNN Newsroom."
Well, the new trading day gets underway in the U.S. in about six hours and here's where futures markets stand right now. As you can see, they are all down.
Meantime, European markets, let's have a look at what they are doing. They're also mainly down. Zurich is slightly up.
And here's a look at how markets across Asia fared. As you can see, it is slightly mixed there. Well, the big news on the US economy, of course, was the Federal Reserve putting the brakes on its relentless interest rate hikes. Well, that brought some joy to Wall Street on Wednesday.
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The Fed's 10 previous rate hikes were meant to cool the economy and as a result inflation. So the market's enthusiasm for the rate hike pause was clear at the closing bell.
But the Fed chairman also said more rate hikes are likely later in the year. So in the end, America's major markets closed mixed as investors tried to assess what the Fed's moves could mean for the economy. So why did the Fed pause its relentless rate hikes? And what does it mean for inflation and the economy?
CNN's Businesses' Matt Egan has a look.
[03:35:05] (BEGIN VIDEOTAPE)
MATT EGAN, CNN BUSINESS REPORTER: This is a pause, not a finale. At least that is the message from the Federal Reserve. The Fed deciding unanimously to keep interest rates steady, that is a significant shift after 10 straight meetings where they raised interest rates.
And yet, the Fed is making clear that they're not ready to declare victory over inflation, at least not yet. Fed officials are penciling in another two quarter point interest rate hikes this year. During a press conference, Fed Chair Jerome Powell, he called out the fact that core inflation, which excludes food and energy, he says that has not cooled off enough. And he opened the door to another rate hike at next month's meeting, calling the July meeting a quote, "live meeting."
So what does all of this mean? Well, for consumers, it is certainly good news that the Fed is taking a breather here with rate hikes because we've seen borrowing costs spike for mortgages and credit cards and car loans. And so, there is some relief there, at least for now.
The pause also means that the Fed thinks that their inflation-fighting medicine is working, that the economy doesn't need these monster interest rate hikes every single meeting just to get inflation back down.
One very important point that Powell stressed again and again during the press conference is that these rate hikes, they hit the economy not immediately, but with a lag. It's kind of like have you take antibiotics. You might not feel the impact right away, but it doesn't mean the medicine's not working. It's just taking some time.
And so all along the risk here was that the Fed was moving interest rates so fast, so much higher, that they were going to overdo it and actually cause a recession. So that is why Powell says that they are moving slower now to look around and see what the impact is in the economy. So again, that doesn't mean that the Fed is done raising interest rates. It doesn't mean that the war on inflation is over. It's just moving in a more deliberate phase. Back to you.
(END VIDEOTAPE)
COREN: For more on this, I'm joined by Justin Wolfers, a professor of economics and public policy at the University of Michigan. Justin, great to have you with us. It was well-telegraphed that the Fed would pause interest rates, but is it the right thing to do considering Fed Chairman Jerome Powell has also indicated that further rate hikes are ahead?
JUSTIN WOLFERS, PROF, ECONOMICS AND PUBLIC POLICY, UNIVERSITY OF MICHIGAN: Well, the Fed's argument, you know, I think it's a good one, is there were still a lot of concerns about the financial system. So we know that a couple of the smaller regional banks, Silicon Valley Bank, most famously, toppled.
And the question was whether that would cause a broader credit tightening that we might see in the economy. And so this was a case of a rate rise delayed rather than the rate rise foregone.
And, you know, on the one hand, they didn't raise today. On the other, it wasn't a promise they're going to do so, but it was a really pregnant hint that it's coming soon.
COREN: Inflation peaked last year at over 9 percent. Now it's hovering around 4 percent and proving sticky. The Fed's target, as we know, is 2 percent. Will Powell need to crash the economy to bring inflation under control, in your opinion?
WOLFERS: My hope and honestly my forecast is no. We've made a lot of progress on inflation. And one way of putting this is the inflation crisis is now behind us. Rates of 9 percent are well in the rear view mirror. The inflation problem isn't, which is a reasonable reading is inflation still running at about 5 percent. But Chairman Powell sounded pretty confident, pretty happy today, pretty chipper that there's a lot of good news in the works on inflation.
One of the really big parts of that is we know a lot about what's going on with the housing market and house prices and rents are not rising at all and they're a big part of the cost of living and so a big part of the inflation story.
COREN: But if things go south, I mean I know you're predicting otherwise, but if they do this could coincide with the U.S. election cycle next year which could then play into the hands of the Republican presidential nominee.
WOLFERS: Well, if there's a recession, it would raise the unemployment rate. Now, it would raise it somewhat from a 50-year low. So things would go from being splendidly good on the labor market front to merely good.
But also, if they were to crash the economy, it would reduce inflation. And that's something that's been very much on voters' minds. So I actually saw in today's Fed forecast an enormous degree of optimism. In fact, they're predicting that come Election Day, unemployment is going to be down at 4.5 per cent. inflation at 2.5%, interest rates are going to be falling. And by jingo, that sounds like the sort of story that Joe Biden goes to bed each night and says his prayers, hoping he'll get an economy like that.
[03:40:16]
COREN: But I think we also have to remember, Justin, the chairman of the Fed had also said that inflation was transitory. So he was wrong on that point. But legacy is important to Jerome Powell. This is a man who comes from the private equity industry. He's worth in excess of $100 million. Inflation is the issue that will define his reign. Some economists believe that if he needs to keep rates high to tame inflation, that is what he will do. But it doesn't seem like the market understands this. Would you agree?
WOLFERS: There's a real disjunction between what the Fed is saying and honestly the single best way to predict what the Fed will do is to listen. And what the Fed is saying has been saying for a while is this tightening cycles not over yet.
What happened was Wall Street got awfully carried away with its own recession talk. The economy kept chugging along no matter what Wall Street kept saying. As Wall Street economists saw recession coming, they thought the Fed would have to respond by cutting rates. And so time and again, Powell has said, no, we mean it. We're going to keep rates high to try and quash inflation.
But I do want to come back to what you said, I don't think that Powell thinks of his legacy as solely being about inflation. This is a guy who I think has took us through the pandemic and was really willing to take some risks to make sure that people stayed in work. And that's actually the thing I admire most about the Powell legacy.
COREN: Well, we'll have to wait and see as to -- as to how this all transpires. But Justin Wolfers, certainly great to get your perspective and to catch up. Many thanks.
WOLFERS: A pleasure, mate.
COREN: The European Parliament has approved landmark new rules on artificial intelligence, moving one step closer to formally adopting a set of laws to regulate the technology.
They call for bans on A.I. biometric surveillance, emotion recognition systems and predictive policing. Lawmakers also want firms like ChatGPT to disclose anything that's A.I.-generated, help distinguish between what's real and what's fake and ensure nothing illegal gets created. Well, Parliament says it will negotiate with E.U. member states to turn the rules into law.
Meantime in a major blow to Google, E.U. regulators are threatening to penalize the company over its online advertising practices.
CNN's Anna Stewart has more.
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ANNA STEWART, CNN REPORTER: The E.U. is telling Google it should break up its online advertising business, saying it's bad for competition. Brussels has filed antitrust charges against the search giant, accusing it of abusing its dominance in the market of buying and selling online adverts.
These claims center around ADX, which is Google's online auction house. It matches advertisers with publishers. And the E.U. believes that Google has unfairly pushed customers to use ADX rather than rival ad exchanges.
This is just the latest blow for Google. In January, the U.S. Justice Department filed a lawsuit and also called for a break-up of the company.
Here at Vivatec in Paris, you'll see all the big tech giants, including Google. And it's where I caught up with Bruno Le Maire, France's finance minister. He says he supports the EU's findings. BRUNO LE MAIRE, FRENCH FINANCE MINISTER: I think that we are just
sticking to the rules and the Commission has the role to be sure that every private company is abiding by the rules. So I fully support the work that is currently done by the Commission, innovation, does not mean that you should get rid of any rule.
STEWART: The E.U. Commission has submitted its findings in writing to Google, according to officials, and that kicks up a legal process which could end in billions of dollars of fines and a breakup of the company. Google says it doesn't agree with the E.U.'s findings and they will respond accordingly.
Anna Stewart, CNN, at Vivatec in Paris.
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COREN: America's top diplomat is heading to Beijing this weekend for a long delayed trip to try and mend some fences.
CNN's Kristie Lu Stout joins us now here in Hong Kong with the details. And Kristie, what are the expectations going into this trip? Because so much is at stake.
KRISTIE LU STOUT, CNN CORRESPONDENT: Yeah, well, according to the U.S. State Department, expectations are low for a breakthrough for this high stakes, very important, long-awaited meeting in Beijing. On Wednesday, both China and the United States confirmed that the U.S. Secretary of State Anthony Blinken will be visiting China this weekend. He was originally scheduled to visit China in February, but that trip was postponed due to the transit of a suspected Chinese spy balloon.
[03:45:00]
Now, this would be the first trip by U.S. Secretary of State to China since 2019, that's five years ago, and both sides did not comment about which officials that Secretary Blinken would likely meet with while in China. But according to a senior U.S. State Department official, he says that Secretary Blinken is likely to bring up the issue of the conflict in Ukraine, as well as to reiterate a call for peace and stability in the Taiwan Strait.
This official also went out of his way to manage expectations in regards to any sort of breakthrough. Let's bring up the statement for you. This, according to Daniel Kritenbrink, the Assistant Secretary of State for East Asian Pacific Affairs, saying, "We're not going to Beijing with the intent of having some sort of breakthrough or transformation in the way that we deal with one another. We're coming to Beijing with a realistic, confident approach and a sincere desire to manage our competition in the most responsible way possible," unquote.
Blinken is also expected to raise the issue, the fate and the cases involving the three wrongfully-detained Americans in China, also to call for appropriate military to military communications. Now, earlier, there was that interesting phone call that took place
between Secretary Blinken and China's foreign minister, Qin Gang. And during that phone call, which took place on Wednesday, Qin Gang urged the United States to respect China's core concerns, including Taiwan.
According to a Chinese foreign ministry statement, he said this, quote, "The United States should respect China's position on the Taiwan question. Stop interfering in China's internal affairs and stop undermining China's sovereignty, security and development interests in the name of competition."
The U.S.-China relationship is at its lowest point in decades over a whole raft of issues, and U.S. officials hope that this visit will help pave the way for more bilateral meetings, including a potential visit by the U.S. Treasury Secretary Janet Yellen to China. Back to you, Anna.
COREN: Kristie Lu Stout, as always, many thanks. Good to see you.
LU STOUT: Thank you.
COREN: Italy says goodbye to the colorful and controversial Silvio Berlusconi. We'll take you inside the Milan Cathedral for a look at the former Prime Minister's funeral just ahead.
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COREN: Italy has said its final farewell to former Prime Minister Silvio Berlusconi. Reports say his body will be cremated and housed in a mausoleum at his villa near Milan.
Wednesday's funeral was an elaborate affair that attracted thousands of mourners. CNN's Ben Wedeman has this report.
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BEN WEDEMAN, CNN SR. INTERNATIONAL CORRESPONDENT: Thousands attended the funeral of former Italian Prime Minister Silvio Berlusconi held in the Duomo of Milan, the largest church in all of Italy, to commemorate a man who was for many larger than life.
The applause, a gesture of respect from his admirers. In attendance were his five adult children from two different wives and his last romantic partner, Marta Faschina, 53-years his junior.
[03:50:06]
Also there was President of the Republic, Sergio Matrella and Prime Minister Giorgio Maloni. But just a handful of foreign dignitaries showed up. Among them, Hungarian Prime Minister Viktor Orban, the Emir of Qatar and the Prime Minister of Iraq.
Wednesday was declared a day of national mourning for a billionaire who was Italy's longest-serving prime minister since the end of the Second World War and one whose flamboyant personality, for better or for worse, has left a lasting mark on Italian politics. I'm Ben Wedeman, CNN, reporting from Rome.
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COREN: Well, the Vatican says Pope Francis is expected to leave the hospital in the next few days. The pontiff is said to be recovering without complications after abdominal surgery last week.
But the Vatican has canceled all public and private audiences until at least Sunday. The 86-year-old Francis has been resting at a Rome hospital and spending time in a small chapel on the 10th floor. He's scheduled to visit Portugal for World Youth Day in early August.
In the coming hours, a vigil will be held in Nottingham, England, for the victims of Tuesday's stabbing attack. Authorities have identified two of the victims as 19-year-old university students Barnaby Webber and Grace O'Malley-Coomer.
The third victim was identified as Ian Coates, a local school site manager. A 31-year-old suspect is in police custody. He's believed to have killed the three victims with a knife and then used a vehicle to injure three others.
Authorities are investigating possible motives for the attacks while the victims' families are mourning their loved ones.
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UNKNOWN: The love that we have out here (inaudible) soon. Look after each other. That's the big thing.
UNKNOWN: I'm lost for words. I've lost my baby boy and I can't even comprehend how I'm going to do and deal with it.
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COREN: Absolutely heartbreaking. Stay with CNN. We'll be back after the break.
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COREN: Golfer Berry Henson will tee off today at the U.S. Open in Los Angeles. He's ranked 444th in the world, but his score as an Uber driver is almost perfect. The 43-year-old has been shuttling people around Southern California for the past seven years all while pursuing his passion for golf. Well now he's finally gotten his big break. Henson qualified for the U.S. Open after a dominant performance at Canoebrook Country Club in New Jersey this month. But he hasn't forgotten his long journey to the big time.
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BERRY HENSON, GOLFER/UBER DRIVER: I've got 3000 rides and I'm a 4.99 Uber rated driver, which I love and I feel, you know, I take pride in that. I like to play games with my passengers when they come in. I usually let them ask me questions to find out what I really do and I can only answer yes or no.
[03:55:03]
And that ends up turning into be fun because they go down like this weird road of entertainment business and being in the movies or whatever it might be.
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COREN: Best of luck to him.
Rafael Nadal has dropped out of the world's top 100 tennis rankings for the first time in 20 years as he recovers from a hip injury. The 22-time Grand Slam champion missed this year's French Open, a tournament he has won a record 14 times.
And the absence means he fell from world number 15 to number 136 in the rankings. The 37-year-old Spaniard underwent surgery on his hip muscle earlier this month, ruling him out for five months and all but ending his season.
Well, the Vegas Golden Knights will have a hometown celebration this weekend after winning the coveted Stanley Cup earlier this week. Officials in the U.S. state of Nevada announced a championship parade and rally for Saturday after the historic win.
The team is only in their sixth season, becoming the second fastest franchise to win the National Hockey League's top award. It's the first time the team has won league's championship.
Environmental protesters in Sweden tried to deface a painting by the French master Monet to call attention to climate change. The two activists tried to smear the artwork with red paint at Stockholm's National Museum and then glued their hands to the protective glass over the painting. The pair demanded action to stop climate change. They were quickly arrested and charged with aggravated vandalism. The museum is assessing if the painting was damaged.
And before we go, you could soon be the owner of these crayon drawings by a future British king. Tomorrow, Hansons Auctioneers are selling these drawings by then-Prince Charles when he was just five years old. Some feature his mummy, Queen Elizabeth and his dear papa, Prince Philip. Those two portraits alone are expected to fetch more than $12,000. Cards by his sister Princess Anne are also on sale. Hansons says the pieces are owned by heirs of a journalist who received them when he wrote a book about the royal children.
Well, thanks so much for your company. I'm Anna Coren, live from Hong Kong. "CNN Newsroom" continues with Max Foster after this short break.
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