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Bank of America CEO Joins CNN Amid U.S. Economic Crossroads; Police: Dallas Zoo Suspect Tampered With Money, Leopard Cages; Colorado State University Apologizes For "Russia" Chant At Ukrainian Player. Aired 7:30-8a ET

Aired February 06, 2023 - 07:30   ET

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

[07:30:00]

(COMMERCIAL)

POPPY HARLOW, CNN ANCHOR: President Biden set to deliver his State of the Union address tomorrow night and a major focus, of course, will be the U.S. economy. The jobs report on Friday shocked about everyone. More than half a million jobs added in the U.S. last month. Unemployment rate, 3.4 percent, the lowest we've seen since 1969.

The Fed, last week, once again hiking interest rates but less aggressively, reflecting cooling inflation. And now, the question is can the U.S. pull off a soft landing and bring down inflation without triggering a recession?

Happy to have Bank of America's Brian Moynihan here, as CEO of one of the biggest banks in the world. He's got some pretty unique insight into where we are going. So, good morning. Thanks for being here.

BRIAN MOYNIHAN, CEO, BANK OF AMERICA: Morning, Poppy. Good to see you.

HARLOW: Let's start with tomorrow night and the State of the Union address. Obviously, the president's going to tout the economy and the jobs report but a big issue is going to be the debt ceiling.

What would you like to hear from the president?

MOYNIHAN: Well, I think on the debt ceiling there's a political process to go into to discuss sort of the level of debt and things like that. I think the market loves stability and the economy loves stability, so we hope that at some point they resolve the technical issues. But they'll have a political discussion and I'm sure that there will be a lot of discussion around the State of the Union about it.

[07:35:06]

HARLOW: But I remember you and a bunch of the other bankers sent a letter in 2011 to Congress warning of how bad a default would be. And that was then and look where we are now politically.

Are you preparing Bank of America for a real possibility of a default?

MOYNIHAN: Oh, we have to be prepared for that not only in this country but in every other country -- other countries around the world, but you just hope it doesn't happen. But you -- hope is not a strategy so you prepare for it and you get ready to make sure you have the liquidity. You have the set-up. We have a lot of consumers who get paid by the government. We have to make sure that that's all set up for them and the waivers on their payments and fees and things like that. That's what we do as we do in a natural disaster or something else.

And so I think hopefully, you've heard both sides say that the idea is not to shut down the government. The idea is to have a strong discussion about the question of how big -- how high the debt should be.

We had to put on a lot of debt in the last couple of years to overcome the pandemic drag on the economy and administrations from both sides of the aisle, so to speak, did that. And now, at some point, we've got to start to figure out how that works in the future. But right now, we've got to get past the issues of just getting through the technical structure.

HARLOW: It sounds to me like you are, though, instilling some contingency plans because this could happen.

MOYNIHAN: Yes, everybody has to.

HARLOW: OK.

MOYNIHAN: Yes.

HARLOW: Do you think it's worth it to have a debt ceiling anymore --

MOYNIHAN: Well, it --

HARLOW: -- this way with Congress in charge?

MOYNIHAN: There's a lot of intellectual discussion about that but -- because one side says if you approve the budget why not approve the debt. The other side says it's a way to control spending. But it's a political process and there's got to be an argument about how we make sure we live within our means as a country, and that argument is going to go on.

HARLOW: But do you think it's worth it? Do you -- do you believe? Because Janet Yellen --

MOYNIHAN: Yes.

HARLOW: -- has been trying to say maybe this shouldn't be in Congresses' hands.

MOYNIHAN: Well, I think Congress has the purse strings -- that's whatever article it is -- so I would be careful about trying to restructure the U.S. Constitution. It's been around for 250 years almost. I think we should leave it alone and make sure it operates correctly.

HARLOW: Fair enough.

Jobs report -- wow -- on Friday. More than half a million jobs created -- so far beyond what Wall Street had been expecting.

Why did that happen when we are seeing slowing in the economy, and what does it mean for the Fed and rates?

MOYNIHAN: Well, this is one of the key issues is that the unemployment rate has stayed very low -- extremely low -- and the labor market stays tight, and that's one of the challenges for the Fed because if you think about prices and stability of prices, one of the questions is wage growth. And it's tipping over and flattening out, which from an inflation perspective is good. In other words, they've started to see the first signs of that.

But the reality is that unemployment is low because people are spending money and a U.S. consumer continues to spend money. So the month of January '23 versus the month of January '22, our consumers spent about four percent-five percent more than they spent last year --

HARLOW: OK.

MOYNIHAN: -- which is consistent with a two percent growing economy, which is consistent with a low inflation economy.

It -- last year in the first quarter of '22 versus the first quarter of '20, this was like 14 percent. So it's slowed down and more consistent with a more normal economy as rates have been risen and people are wondering about unemployment.

But that strong jobs number is an indicator of a good U.S. economy. And the Fed has raised rates and has slowed it down but not slowed it down enough to choke off inflation.

HARLOW: Well, what's the disconnect between Wall Street and Main Street? We saw what happened to stocks on Friday. We're a little bit ahead of the open here. Is this Wall Street seeing what the Fed may have to do with this -- they need the jobs market to temper and it just isn't.

MOYNIHAN: Yes, and I think that's the question, is how long will the rates have to stay up?

HARLOW: Yes.

MOYNIHAN: And then what's the drag on corporate profits and interest rate costs for corporations and companies -- mid-sized companies and small companies -- and that's the real question.

HARLOW: Yes.

MOYNIHAN: And so the market is trying to discount that every day, trying to figure out that. So our strategists have the market sort of flattish for the year largely because of getting the earnings back in line as to what the earnings growth will be.

HARLOW: Yes.

MOYNIHAN: But if you go to the core Main Street economy --

HARLOW: Yes.

MOYNIHAN: -- what it really means is people working. They're getting paid more.

HARLOW: Yes.

MOYNIHAN: They're spending more. They have the capacity to borrow. Their debt is in pretty good shape.

And while there's attributes to this that don't fall evenly across society, when we look in our broad 30-plus million consumers we can see -- continue to see good health there, which is a good thing.

HARLOW: Yes, and you've been more optimistic for months now than a lot of your Wall Street counterparts. Some of them are now in your camp.

I thought it was interesting last night on "60 MINUTES" the IMF chief Kristalina Georgieva gave us -- told Lesley Stahl that their outlook -- the IMF outlook now is that the U.S. will, quote, "narrowly avoid falling into a recession." Do you agree?

MOYNIHAN: Well, we have -- we've had consistently since -- for a good while -- since the Fed started raising rates after the spike in inflation that was clear in the summer of '21 and in the fall of '21 that they finally went after in early '22 -- we've had a mild recession predicted in the future about a year away.

The problem is that just keeps moving out -- so the old picking the steak (PH) analogy. We went from the last quarter of last year to the first quarter -- first part of this year to the middle of this year. But it's always been a plus or minus one percent on a given quarter basis. And what that really means is it's bumping along at a -- basically, a flat economy.

[07:40:00]

And so, that is completely different than the 30 percent downdraft we had in the --

HARLOW: Yes.

MOYNIHAN: -- quarter after the pandemic or the five or six percent GDP downdraft we've had in other recessions. So that is a soft landing. That is a mild recession. That is what people -- Kristalina and others are talking about.

HARLOW: Not a -- no, she said -- you're not saying no recession though yet, right?

MOYNIHAN: Well, I don't think there's a heck of a lot of difference between minus one percent and plus zero.

HARLOW: Just a lot of headlines.

MOYNIHAN: Oh, there is a lot of headlines, a lot of sturm and durn (PH) and the NBR will have to determine, but we'll find that out in about two years.

What we really know is we've made it through one of the most unusual crises added to other crises and a spike in inflation --

HARLOW: Yes.

MOYNIHAN: -- on Fed rates and the economy has gone along.

HARLOW: Yes.

MOYNIHAN: And that's the power of the U.S. economy.

HARLOW: One benefit to consumers of higher interest rates -- one of the few is higher savings rates.

But if we can pull this up, Christine Romans brought up this chart on Friday and I really wanted to get your take on it because we're not. Like, there is the Fed funds rate -- the line that's going up -- and there's the savings rate. Why -- it just feels like Main Street's losing out again.

MOYNIHAN: Well, the money goes into -- off-balance sheet structures. You've seen there's been record up-flows -- you know, record for the near-term flows into money market funds and people move their money into places that it can earn higher rates.

The bank balance sheets have lots of transaction accounts at zero- interest deposits. They're going to be zero no matter what rate it is and that's because the nature of a checking account is who get 18,000 ATMs, in our case, at 3,000 -- almost 4,000 branches, 24-hour calls. This wonderful online experience -- that's all part of what you do in your checking account.

So there's a little bit of -- the savings rates -- money people have for saving -- investing are going up. The checking rates don't. And then, frankly, people move the money into off-balance sheet places.

HARLOW: Just not going up the same way.

Let me end on China with you. Last week the IMF again upgraded their global outlook largely because of China reopening after zero-COVID. But now with the whole balloon incident, the U.S. general warning a few weeks ago about potential war with the U.S. and China within a matter of two years, I wonder what your level of concern is right now, Brian, as you think about U.S.-China relations and the impact on the world economy.

MOYNIHAN: Yes. China's a wholly different interconnectivity of the world economy than the Russia situation was. The sanctions on Russia came in. All the banking systems and other systems enforced them but it was a smaller, more internal economy. The Chinese economy is hugely into the supply chain, obviously, of all types of things from furniture to bicycles, to chips.

HARLOW: It's too late to decouple.

MOYNIHAN: And you can't -- well, coupling is a long, long process and so too late is a question.

But that tension you hope solves because frankly, that -- it'd be a much bigger hit to the world if something really went wrong. And I think that's what actually pushes people back in the room to make sure something doesn't go wrong.

But it's been interesting over the last few years watching this sort of shadowboxing going on between the two countries. But from a pure economic perspective --

HARLOW: Yes.

MOYNIHAN: -- the best thing in the world is to have free trade. The best thing to have an open economy is -- the best thing is to have a good move, the best things to have the U.S. citizens be able to buy TVs for very low rates because they're manufactured in places that they have inefficiency.

But the reality is you have two countries that are competing to be the world's dominant power and that's going to be interesting.

HARLOW: Your level -- let's leave it here. Your level of concern about U.S.-China relations? You've been CEO for a really long time. Is it the highest now it's ever been?

MOYNIHAN: Well, it has to be because there's the most going on.

HARLOW: Right.

MOYNIHAN: But that's -- again, you prepare for all that and you plan for all that, but -- and you'd hope that the natural tendency -- codependence pushes people back in the room --

HARLOW: I hope so.

MOYNIHAN: -- and we'll see what happens.

HARLOW: Brian Moynihan, thank you.

MOYNIHAN: Thank you.

HARLOW: Appreciate it very, very much -- Kaitlan.

KAITLAN COLLINS, CNN ANCHOR: Great interview there, Poppy, and thanks to Brian for joining us.

Colorado State, meanwhile this morning, is now apologizing for its students after some of them started a Russia chant at a basketball game aimed at a Ukrainian player who was on the opposing team. DON LEMON, CNN ANCHOR: That was awful.

And missing animals in holes and enclosures. A series of suspicious incidents has Dallas Zoo on high alert.

(BEGIN VIDEO CLIP)

HARRISON EDELL, EXECUTIVE VICE PRESIDENT, ANIMAL CARE AND WELFARE, DALLAS ZOO: A lot of us in animal care at the zoo have gone to some really dark places in our minds in the last month. I can only imagine how scary that is for a langur to have a person in their space who is trying to aggressively grab them.

(END VIDEO CLIP)

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[07:49:06]

LEMON: Welcome back, everyone.

Police in Dallas now saying the suspect they arrested after the theft of a pair of Tamarin monkeys from the Dallas Zoo last week could potentially be linked to tampering with several other animal habitats.

CNN's Ed Lavandera live for us this morning in Dallas. Good morning, sir. This is such an odd case involving so many different animals. What is going on here?

ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT: Well, you know, the animal caretakers at the Dallas Zoo have been through an excruciating month as these incidents have garnered worldwide headlines. Zookeepers say that it's been a profoundly disturbing gut punch. And even though one person has been arrested, the mystery of why this has happened still looms over the Dallas Zoo.

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LAVANDERA (voice-over): The high-flying Gibbons apes are oblivious to the fact that their little corner of the Dallas Zoo is a crime scene that's garnered worldwide attention. For the humans at the zoo, it's been a nearly month-long nightmare.

[07:50:05]

EDELL: And they broke into the building.

LAVANDERA (voice-over): Harrison Edell is the Dallas Zoo's executive vice president of animal care and welfare. He's showing us where the mysterious break-ins, escapes, possible murder, and animal abductions occurred.

It started here in this enclosure, which is home to four langur monkeys. Edell says they found a four-foot-high cut in the wire mesh.

EDELL: We also noticed that some of the climbing structure inside the habitat was broken and it had literally collapsed, which made us think an animal larger than a langur had been in here.

LAVANDERA (voice-over): None of the monkeys escaped.

EDELL: A lot of us in animal care at the zoo have gone to some really dark places in our minds in the last month.

LAVANDERA (on camera): You can almost picture whoever was in there chasing these guys down. It must have been rather frantic for the animals.

EDELL: I can only imagine how scary that is for a langur to have a person in their space who is trying to aggressively grab them.

LAVANDERA (voice-over): Around the same time and just two exhibits away, the clouded leopard habitat was cut open. A female leopard named Nova walked right out, setting off what the zoo calls a code blue.

LAVANDERA (on camera): The SWAT team rolled out here that morning.

EDELL: Yes.

LAVANDERA (on camera): That's got to be terrifying.

EDELL: Yes. I mean, SWAT team heard the word "leopard" and thought leopard-leopard.

LAVANDERA (voice-over): High-tech drones were used to search for the 25-pound cat to no avail. That afternoon, two zoo employees standing about 30 yards away from Nova's habitat found her.

EDELL: One of them said to the other one, "Why is that squirrel so pissed off?" -- and there's a squirrel in the tree barking. And down here in one of these cabinets, the leopard was curled up in a cabinet looking at them.

LAVANDERA (on camera): Down here?

EDELL: There's the curator who said why is the squirrel so upset.

LAVANDERA (voice-over): Lisa Van Slett, the zoo's mammal curator, called for help.

LISA VAN SLETT, MAMMAL CURATOR, DALLAS ZOO: And then a chase ensued.

LAVANDERA (on camera): She's safe and sound now.

VAN SLETT: She's safe and sound now. At first, we thought maybe an isolated incident. Somebody tried something and failed.

LAVANDERA (voice-over): It was just the beginning. A Lappet-faced vulture named Pin was found dead. Dallas police said the rare bird had been wounded. And the last week, two rare Emperor tamarin monkeys were taken from the zoo.

EDELL: And they made a huge cut in this wall of mesh right here in order to get into the habitat. LAVANDERA (voice-over): The one-pound monkeys were found the next day in this abandoned house about 15 miles away. Zoo officials say the monkeys were unharmed.

That last incident led police to arrest 24-year-old Davion Irvin. He's been charged with six counts of animal cruelty and two counts of burglary to a building. But investigators say he is not currently charged in connection to the death of the vulture.

JOE EXOTIC, STAR OF "TIGER KING": My name is Joe Exotic and this is Sarge.

LAVANDERA (voice-over): Wildlife experts say the fascination with exotic animals is fueled by shows like "TIGER KING" and social media influencers creating an underground world of exotic animals as pets.

DAN ASHE, PRESIDENT AND CEO, ASSOCIATION OF ZOOS AND AQUARIUMS: It's a massive problem that globally, the illegal pet trade is again driving many animals toward extinction. And we think of it oftentimes as a kind of other-world problem. This is an opportunity to let people know that animals need to be left alone in their homes.

EDELL: I'm going to sound so old when I say this but it doesn't help that social media influencers are showing kids that it's cool to have this thing in my house.

LAVANDERA (on camera): Do you think that might be one of the motivations here -- just that kind of influence?

EDELL: I do. I do.

(END VIDEOTAPE)

LAVANDERA: And Don, that suspect, Davion Irvin, still remains in the Dallas County Jail and is being held on a $25,000 bond.

Meanwhile, the Dallas Zoo has been adding more cameras. Before all of this happened they've had more than 100 cameras around the property. They say they've been adding more and more as the days have gone by -- Don.

LEMON: Yes. It's not cool, unless you're a professional, to have one of those.

Thank you very much, Ed Lavandera -- appreciate that.

COLLINS: Also this morning, Colorado State University now apologizing after students started a chant against a Ukrainian basketball player on Utah State's team Saturday night.

(BEGIN VIDEO CLIP)

ANNOUNCER: So, 49 tense seconds remaining here. Max Shulga goes to the free-throw line.

SPECTATORS: Chanting "Russia." (END VIDEO CLIP)

COLLINS: You can hear that refrain in the background -- spectators chanting "Russia" at Max Shulga. Shulga is from Kyiv, the Ukrainian capital that has been the target of Russia's violent assault over the last year.

Colorado State is now apologizing, saying in a statement yesterday, quote, "Every participant, student, and fan should feel welcomed in our venues, and for something like this to have occurred is unacceptable at Colorado State."

Utah State said the chants were "inappropriate and unacceptable" but said they do appreciate the school's administration for not condoning the behavior.

Shulga later put out his own statement accepting the apologies, writing, "This has been an extremely difficult and challenging year with my family and loved ones so far away and living in constant danger. As for the chants last night, while extremely upsetting in the moment, I also know how emotions can run high during competition and people can do and say things they don't mean. I hope you will all join me in praying for peace in Ukraine."

[07:55:14]

Just a classy response on his part.

LEMON: It is.

HARLOW: A very classy response.

LEMON: It is. Just saying things they don't mean. But how do you get there? How do you get to the chanting "Ukraine" (sic). That's just --

HARLOW: Chanting "Russia."

LEMON: Russia. That's --

COLLINS: Yes, it's incredibly thoughtless.

LEMON: Yes.

HARLOW: All right. We are, of course, continuing to follow this tragic breaking news overnight. The death toll continuing to rise after a powerful 7.8-magnitude earthquake rocked Turkey and parts of Syria. And now, more than 1,500 people are confirmed dead. We will speak to a rescuer who is live at the scene next.

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LEMON: Good morning. Here are five stories to start your day.

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