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NATO Chief Speaks as Leaders Meet for Annual Summit; Sources: Defense Intel Agency Assesses U.S. Strikes Did not Destroy Iran's Nuclear Sites; Palestinians Still Being Killed in Gaza While Waiting for Aid; Israel's Offensive in Gaza Shows No Signs of Abating; Powell Throws Cold Water on July Interest Rate Cut; Anniversary of Deadly Nairobi Protests Sparks New Unrest. Aired 9-10a ET
Aired June 25, 2025 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
UNIDENTIFIED MALE: -- Putin and Mr. Trump seems to be in rather friendly terms with him. Would be interesting to hear what you talked about him.
MARK RUTTE, NATO SECRETARY GENERAL: I've not changed my views of Vladimir Putin. I don't trust the guy. And of course, I had a lot of dealings with
him personally, when we had a terrible situation with Flight MH 17, the Malaysian Airline Flight MH 17 being shot out of the air by Russia in July
2014. And Putin telling me that he was not present in the Donbas and that he had no dealings in Ukraine. And this that any other. And this was --
these were all lies. We know that.
UNIDENTIFIED FEMALE: OK, for the sake of geographical diversity, all the way in the back telegraph.
UNIDENTIFIED MALE: -- Mr. Rutte, I have two short questions for you right here today. How do you think Vladimir Putin will look at this NATO Summit
in The Hague and the appointments being made between the eight NATO allies? The other question, completely different one.
But how do you think how big is the role of the Dutch King, William Alexander, the Queen Catharina-Amalia in organizing this NATO Summit and
being making it into a success.
RUTTE: Big role. Last night was really amazing. And, I mean, we are both Dutch, and we can be very fortunate to have this Royal Family. Of course,
they have that overview which many politicians were there for one or two terms can never compete with. So, we have a King here in the Netherlands
who is now in that position for 12 years.
And you sense that I mean, the breadth the benefits from which he is speaking, including with the American President and other leaders, is
really impressive. And I've seen the same before with his mother, Queen Beatrix. So that is one of the huge advantages of being of having a
monarchy.
And I would say, well, to your and my country, let's be happy. And let's be glad and grateful that his family is willing to do that. On the other
question. I mean, look what Putin achieved. He wanted to divide the West, and now Finland and Sweden have joined NATO. He wanted to divide the West,
and now we have committed to a 5 percent spending target. So, he cannot be very happy, and he should not be very happy.
UNIDENTIFIED FEMALE: All the way in the front on the left.
UNIDENTIFIED MALE: (Inaudible).
RUTTE: Never give the microphone away.
UNIDENTIFIED MALE: -- see. There -- Newspaper from Bosnia, Herzegovina. Thank you much for this opportunity. So, for the West Balkans, for the
first time, long time, it hasn't been mentioned in the communique. What does it mean for our region? You yourself are several times talking about
the importance of the region for the alliance. But can you tell us why it's not mentioned?
RUTTE: Yeah. But again, this is not your traditional communique, which you would see in the U.N. or in NATO in the past, where you would have 60
pages, 90 paragraphs, basically talking about the world from the birth of Jesus up to today and everything in between.
I mean, that's dumb. We try to focus. So, we are still very much concerned. K4 is there in Kosovo. U4 is there in Bosnia? Herzegovina, I was visiting
the region. Had extensive talks with leadership in Bosnia, in Kosovo. I had a dinner in Brussels with the President of Serbia. So, we are very much
involved as NATO.
The EU, of course, is very much involved. We closely coordinate with -- and Ursula Von Der Leyen on the European side. But what we really want to do
here is not to recall all the language like the irreversible path of Ukraine into NATO. It's still there. Nothing changed, but really to focus
on three core issues in five paragraphs, and one of the paragraphs is about the next meeting. So basically, four paragraphs, and that is about, as you
know, production spending in Ukraine.
UNIDENTIFIED FEMALE: OK, final question to the young reporters in the front.
RUTTE: Yes.
UNIDENTIFIED FEMALE: We'll get a mic to you just a moment.
UNIDENTIFIED FEMALE: Thank you very much for this opportunity, Secretary General. We are the youth correspondents.
RUTTE: Absolutely. And you are here now for two days, and you'll be marvelous.
UNIDENTIFIED FEMALE: Thank you. There's a lot happening in this world, and many children worry about it. Do you think we children can also fight for
peace, or should we trust that you could bring peace to the world? Thank you.
RUTTE: I cannot personally bring peace to the world. But what we can do collectively is to make sure that we are so well prepared, we are so
strong, that nobody will ever attack us. So, the best way to preserve your future, and that our children can live in a democratic, free, open society,
where you can be who you want to be.
Think what you want. Have free press. What you basically have in the West, and let's be honest, it's fantastic, is to make sure that we spend enough
on our defense. Particularly if we know that we have some adversaries who are really trying to get at us.
[09:05:00]
So that's the best way to preserve your future, and that's what we try to do today to make that commitment. But you standing here is really touching,
and we have seen each other for two days. We know each other for some longer time. I really want to thank you both, and in you all the free press
sitting in this room for your fantastic work, and see you soon in Brussels or elsewhere. Bye, bye. Take care. Thanks.
UNIDENTIFIED FEMALE: Thank you all very much. That's all we have time for today.
BECKY ANDERSON, CNN HOST, CONNECT THE WORLD: We've been listening to the Secretary General Mark Rutte, NATO members agree to increase their defense
spending from 2 to 5 percent of GDP annually by 2035 marking a significant increase in spending. He said the support from members on this is iron
clad.
President Trump, he said, has been clear that the U.S. is committed to NATO. He said we are in this together, committed to Article Five. And Rutte
defended his own somewhat fulsome language in support of Donald Trump on both his decision to attack the Iranian nuclear sites and in forcing
members to increase its spending.
He said that being Rutte that the language was a question of taste, maybe, but it reflects how he feels about the U.S. President. And on Ukraine, a
more traditional NATO agenda item, he said, our aim is to back Ukraine in the fight today to ensure its prosperity tomorrow. Welcome to "Connect the
World". I'm Becky Anderson, live from CNN, Middle East Programming Headquarters. The time here just after 05:00 p.m. in Abu Dhabi.
Well, as we normally do, let's take a quick look at U.S. market futures and the stock market in New York will open about 30 minutes from now. This is
the story on the futures markets pretty flat, but record highs are in sight, and futures investors clearly keeping an eye on geopolitics, but
also keenly focused on further testimony from the Fed on Wednesday, amid hopes recent comments might just point to an easing in interest rates
always good for stock market -- generally.
Well, U.S. President Donald Trump is taking his unorthodox foreign policy approach to the NATO Summit today. Earlier, Mr. Trump and his top team
launched into a defense of their operation midnight hammer the strikes on Iran's major nuclear facilities at the weekend, and went on the attack
against whoever leaked information about damage assessments on the president's claim that Iran's nuclear capability has been completely wiped
out. The Trump team had some surprising support. Watch this exchange that happened just a few hours ago at The Hague.
(BEGIN VIDEO CLIP)
MARCO RUBIO, U.S. SECRETARY OF STATE: There's no way Iran comes to the table. Somehow, nothing had happened. This was complete and total
obliteration. They're in bad shape. They are way behind today compared to where they were just seven days ago, because of what the president did.
RUTTE: -- can I can -- I just alert you to one other aspect. So, the great thing is, you took out the nuclear capability of Iran. This was crucial.
You did it in a way which is extremely impressive, but a signal sense to the rest of the world that this president, when it comes to it, yes, he is
a man of peace, but, if necessary, he is willing to use strength, the enormous strength of the American military. So, I think that signal to the
rest of the world, this is far beyond Iran, is extremely important.
(END VIDEO CLIP)
ANDERSON: Well, that is Mark Rutte, the NATO Chief there, sort of in support of Marco Rubio's contention. Clare Sebastian is at The Hague.
Clare, what's your assessment of what we have heard today, both during that exchange with Donald Trump, his team and the NATO Chief, and indeed, just
moments ago, from the NATO Chief in announcing the top line I guess from this summit, which was expected, the member states will increase their
defense spending to 5 percent by 2035?
CLARE SEBASTIAN, CNN CORRESPONDENT: Yeah look, I think with that top line regulator got what it wanted and what it has worked extremely hard to
deliver, packaged up nicely to Donald Trump as a foreign policy win. But I think behind that, what we had was a summit that really, I think, revealed
a level of desperation to keep the U.S. President on the side.
He has expressed skepticism, almost to the point of wanting to pull the U.S. out of NATO in the past, even coming into this, he said that he
thought there were multiple definitions to Article Five, which really stands at the core of NATO that senses all for one and one for all that
neutral defense clause.
And that is something that needed to have to spend the day essentially trying to clarify. And we just heard that again from Mark Rutte in that
press conference. But they've had to put on this charm offensive from the NATO Secretary General. And I think if you look at the communique, yes you
have that big banner headline of them committing to 5 percent.
[09:10:00]
But we know that the language is relatively flexible, and that Spain was the first country to negotiate that, saying that they would struggle to
meet 5 percent and they could hit the capability targets that NATO wanted with less than that other countries have jumped on, and it raises questions
about what comes next. Will more countries fall by the wayside, and how does this impact the deterrent against Russia that NATO is trying to
present, Becky.
ANDERSON: Clare, I know that you just spoke to the Finnish President. Let's just have a listen to some of that exchange.
(BEGIN VIDEO CLIP)
ALEXANDER STUBB, FINNISH PRESIDENT: What we're trying to do with Ukraine is basically to work towards a ceasefire and then peace negotiations. And the
fact that it is not mentioned doesn't mean that it wasn't touched. I mean, in virtually every intervention in the room, we somehow mentioned Ukraine.
For me, if you look at NATO and its basic function, Ukraine is the litmus test. If Ukraine doesn't win, NATO loses, and we don't want that.
SEBASTIAN: I want to ask you about there's been a, clearly, a wholesale, concerted effort by NATO to keep the U.S. engaged, and some of that has
been in the form of pure flattery. Do you think that went too far?
STUBB: Well, you know, I don't make a judgment on that. Diplomacy has so many different forms. You know, you do it on the phone, you do it by
messaging. You know, you do it face to face, and at the end of the day in diplomacy, you try to get a goal and an aim. And what did we achieve here?
We achieved a historic result where NATO went back to its roots of collective defense, and it turned to Russia. We achieved 5 percent of
defense expenditure, and we created a new NATO with more European responsibility. So, I sort of mirror everything to that.
(END VIDEO CLIP)
ANDERSON: Clare certainly the first answer that we heard there was in response to, I guess, a question about why it is that Ukraine wasn't
mentioned in the communique, correct?
SEBASTIAN: Yeah. Yeah. And Becky, look, it's an absolutely extraordinary question to have to ask for an alliance that is essentially only in
existence because of the threat of Russia that in the fourth year of a full-scale war in the middle of Europe, they wouldn't mention the country
that it's being waged against in their communique.
Russia did get a brief mention as a long-term threat, but I think what you heard there from the President of Finland was an effort to sort of wrestle
it back into the spotlight, saying that essentially, it's a litmus test the NATO alliance, that it's still critical. We heard it again from Mark Rutte,
insisting that Ukraine is still on an irreversible path to NATO.
But again, this smack of that desire to keep the U.S. on side. We know that President Putin going -- President Trump, rather, going into this, said
that he wanted to make a deal with Putin. He's still trying to move down that diplomatic track, even though the violence in Ukraine is escalating.
And I think that this sort of sidelining of Ukraine again, as I said, speaks to that desire to essentially keep the U.S. happy.
ANDERSON: Good to have you. Thank you very much indeed. Well, the Middle East very much a focus at NATO. In fact, earlier, when Donald Trump entered
the summit, it was the focus and the crucial topic of intelligence, about the impact of the U.S. strikes in focus and being discussed.
We've been reporting that early U.S. Intel assessment suggesting strikes only set back Iran's nuclear program by months, and the Trump team's robust
response to that. And just into CNN, the Iranian foreign ministry has just announced that its nuclear installations were quote, badly damaged in U.S.
and Israeli attacks.
Well, Zachary Cohen has been following the law of this from Washington, and he joins us know that. Zach, what do you make of everything that we are
hearing at this point?
ZACHARY COHEN, CNN NATIONAL SECURITY REPORTER: Yeah, Becky, obviously, a lot of different parties trying to figure out exactly how much damage was
inflicted by those U.S. strikes. But really the -- what we're seeing now is the beginning of the process to sort through the facts and make an
assessment based on those facts.
That's something that President Donald Trump does not seem to have waited for when he made his pronouncement immediately following the strikes that
Iran's nuclear capabilities have been totally obliterated. And so, the significance of this DIA Defense Intelligence Agency assessment that we've
been reporting on is that it's the first known U.S. intelligence agency that has weighed in on what the extent of the damage was based on this
early initial analysis.
And this analysis of an -- of a battle damage assessment that was produced by U.S. Central Command. So, this is involving multiple parts of the U.S.
Pentagon. Again, it's an early read that says and casts and injects some uncertainty into what the extent of the damage was. It says that it's
unclear the damage that was inflicted and unlikely that the centrifuges at some of these facilities as well as that stockpile of already enriched
uranium were destroyed.
[09:15:00]
And it says that ultimately, it's likely that the strikes only set back Iran's nuclear program by a matter of months. And that is at odds again
with the timeline that we've heard from the White House. Donald Trump earlier today, claiming that the strike set back Iran's program by a
decade.
And I think at this point, what we're seeing is that there is not really the evidence to back up the extent to which the U.S. President, and to a
certain degree the Israeli Prime Minister, are claiming these strikes had.
Now let's also keep in mind that this assessment, it's very clear, could evolve and change as more intelligence is gathered and the Israeli -- the
damage inflicted by the Israeli strikes is going to be a key part of this evolving analysis. And so ultimately, all sides agree that these facilities
were damage significantly. It's just a matter of understanding the extent of that damage and really lining that up and comparing it to what Donald
Trump has said publicly.
ANDERSON: Good to have you. Thank you. Well, I want to bring in Ravi Aggarwal, who is the Editor-in-Chief of Foreign Policy. It's good to have
you. You just there at The Hague. What do you make of what you are hearing there, both on sort of NATO business, but also from the U.S. President
today and his team and his relationship with Mark Rutte, the NATO Chief.
RAVI AGGARWAL, EDITOR IN CHIEF, FOREIGN POLICY: I think the rest of the world has learned by now that flattery really works with the American
President. He likes it. He likes to hear stuff like that. And, you know, it's sort of, it's enduring around the world now.
But Becky, one thing is quite clear from this summit, if all of it was designed to please Trump, the 5 percent target we've been talking about,
not real, sort of substantive mentions about countering Russia. No real, substantive discussions about rearming Ukraine.
None of the things that could cause reason for Trump to blow up the summit, if all of that is true and if NATO has emerged with a 5 percent target,
what is also true Becky is that there are no checks on whether any of these countries will meet those targets in the future.
But also, crucially, something that's come up in many of my conversations with several foreign ministers and defense ministers here is that there's a
growing nervousness that they've got this number now they need to go back to their people and get them to agree with it.
And there's a good chance once you do that, that the math might not add up, because what do you cut to get those numbers to work? And you know, again,
in any sort of electoral democracy, the numbers may not add up.
ANDERSON: You're making some very good points. When Donald Trump arrived earlier on, he one of the first things he was asked by gathered reporters
was, how is the ceasefire by Iran and Israel going? Mideast very much a focus earlier on today. And he said, well, he said, very well, it's great.
Now I just want to get your thoughts on a couple of things. Iran's U.N. Ambassador thanked Qatar for its role in the Iran Israel ceasefire on
Tuesday, a day after Iran launched an attack on a U.S. Air Base in the Gulf country. Qatar's Foreign Ministry explains why, despite the attack, they
worked with President Trump to help forge a deal. This was part of my exchange with the Foreign Ministry Spokesman earlier today, Ravi.
(BEGIN VIDEO CLIP)
MAJED AL-ANSARI, QATARI FOREIGN MINISTRY SPOKESPERSON: He's trying to save the call from President Trump, telling him that a deal was possible between
Israel and Iran, and he asked on Qatar to play that role. And this is where our machine started working.
Immediately, there was a call next morning between His Highness and the President of Iran where he first of all apologized for the attack and
wanted to ensure that he did not want to put Qatar in harm's way, and His Highness made it very clear to him that such an attack will not be
accepted, that this goes against everything that has to do with the naval legal relations which we have had with Iran.
We chose at that moment when we had all options on the table, we chose the pathway to diplomacy that would get the results done, that would get us
out.
(END VIDEO CLIP)
ANDERSON: We are awaiting a news conference from Donald Trump, and I am absolutely sure that the Mideast U.S. strikes on nuclear facilities at the
weekend will all be a focus for his attention, as well as those gathered.
But you've just heard the Spokesperson for the Qatari Ministry of Foreign Affairs, describing Trump's moves from this weekend. Do you think Donald
Trump's goal was to solve this with diplomacy? Does the U.S. Administration -- does Donald Trump himself see this as a massive win for the Middle East
at this point? Is it clear from those that you are speaking to?
[09:20:00]
AGARWAL: No, it's not really. And even within the administration, I think you know, there's an outward story of how they've brokered a ceasefire. And
Trump has really been quite desperate to sort of show and prove wins in various conflicts and arenas around the world.
And Becky, the jury's out, you know, he's been frustrated in trying to create peace between Russia and Ukraine. We've got a ceasefire between Iran
and Israel, although that was sort of a little bit shaky in the beginning, and now there are disputes over whether any of this was worth it, if Iran's
nuclear program has only been set back by a few months.
And then beyond that, there's the larger question of whether the long- awaited pivot to Asia, which multiple American presidents have promised, and so has Trump, and amid all of that, he's also got a faction within his
sort of base, the MAGA base, that really doesn't want America to get too embroiled in all of these conflicts abroad.
So, Trump has been frustrated over the last few days in juggling all of these different sorts of the tightrope walk act that he's currently doing.
And I think within all of that, he was quite upset that the attack on Qatar took place on the U.S. base there, and that's some of the frustration that
you were hearing there from your conversation with the Qatari spokesperson.
ANDERSON: It does seem to be a path for talks between Israel and Hamas at this point. That's another part of this that we discussed with Masjid Al-
Ansari. And our viewers will get to see that in the next hour or so for the time being. Ravi, thank you very much indeed.
Still to come, aid distribution sites in Gaza are turning into scenes of deadly chaos. A look at the dire situations, just ahead.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
AL-ANSARI: The situation in Gaza, I mean, it's now rhetorical to just say that it is inhumane. We are seeing the catastrophe go on unnoticed around
the world at a time when there are 2.3 million people dying out of hunger, minutes away from food and facilities that would be able to treat them.
(END VIDEO CLIP)
ANDERSON: Well Qatar's spokesperson for the foreign ministry there on the situation in Gaza, which he describes as inhumane. Israel's offensive in
Gaza shows no signs of slowing down in less than two weeks since the Israel's bombardment of Iran began on June the 13th, health officials in
Gaza say more than 860 people have been killed by Israeli fire.
Palestinians, desperate for food, are still having to face the grave risk of coming under deadly attack near aid distribution sites as CNN's Salma
Abdelaziz, now reports.
SALMA ABDELAZIZ, CNN CORRESPONDENT: Could a ceasefire deal be reached in Gaza after a truce was brokered to end a 12-day conflict between Israel and
Iran.
[09:25:00]
There are now hopes and calls that diplomacy could win out in Gaza as well, but Israel's offensive there shows no signs of slowing down. Just in the
last couple of weeks, while headlines were focused on Iran, more than 860 Palestinians were killed by Israeli fire inside the enclave.
Dozens of them were killed, trying to get food in a place where starvation is spreading and where the UN warns more than 2 million people living there
are on the brink of a man-made famine. Now, President Trump has expressed optimism that the deal in Iran could open up channels for Gaza as well.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: I think great progress is being made on Gaza. I think the -- because of this attack that
we made, I think we're going to have some very good news. I think that it helped a little bit. It showed a lot of power.
Yeah, I think it helped. But we're going to get separately even before this, we were very close to making a deal on Gaza.
(END VIDEO CLIP)
ABDELAZIZ: But in an address to his nation. Prime Minister Netanyahu said he is going to now return his focus to his battle against Hamas. He says
that Israel will not let its foot off the gas when it comes to its offensive on the enclave. But there is, of course, signs of just how much
pressure this is putting on the Israeli military.
The call for reservists to join duty has been extended into July, and at least seven Israeli soldiers were killed in Southern Gaza in Khan Yunis
when a bomb attached to their armored vehicle detonated. Now on those mediation efforts, Qatar, which is of course, one of the mediators, says
that it does hope indirect talks could resume in the next couple of days.
It says that there are ongoing diplomatic efforts to find middle ground when it comes to the U.S. proposal currently on the table, which proposes
that a certain number of Israeli hostages would be released in exchange for a 60-day ceasefire. Now, Hamas has said it is open to negotiations, but it
is unwilling to lay down arms, of course.
But for the families inside Gaza still suffering in that enclave, this deal needed to be reached yesterday, Salma Abdelaziz, CNN, London.
ANDERSON: Well as Salma, pointed out you heard Donald Trump earlier asked about whether this Israel-Iran ceasefire deal will have positive impact on
the Israel-Hamas negotiations and Qatar's Majed Al-Ansari speaking to me about this earlier today, about the potential for Israel-Hamas talks. Have
a listen.
(BEGIN VIDEOTAPE)
AL-ANSARI: This is the time now for President Trump to push forward, and we believe that he is sincere about it, and his team with Steve Witkoff is
sincere about it, and we are willing to help on that. As you know, we have been talking to all sides, all through the past couple of weeks, including
the past couple of days, to see if we can use the momentum created by the ceasefire between Iran and Israel. But of course, the efforts are still
ongoing.
ANDERSON: The prime minister said Tuesday that Qatar hopes indirect Hamas- Israel talks can take place in the next two days. We've just heard from Donald Trump, who's at the NATO summit. When asked he said he was hoping
for something very, very soon.
So, there's hope, it seems, but there's also a very specific timeline. Is that timeline realistic from the prime minister, for example.
AL-ANSARI: Yeah.
ANDERSON: And what does this deal look like that they will be discussing?
AL-ANSARI: You know, Becky, in our line of business, you have no other option than to be hopeful. And while, as I said, the talks are still
ongoing, we are still trying to get the positions of both sides closer and start trying to convince both sides to get into talks again. We remain in
contact with all sides in order to get to that reality.
As I said, there was momentum created by the ceasefire between Iran and Israel, but we're not out of the woods yet. And there are a lot of details
that I can discuss right now about the deal in place, but I can tell you that it's the same parameters you know that keep going in and out of the
talks, but we are trying to find that sustainable process that would bring us to lasting peace in the region, not only to ceasefires that last for a
short period of time.
(END VIDEOTAPE)
ANDERSON: Well, Nic Robertson joining us now from Tel Aviv, and some hope certainly being expressed both by Qatar, a crucial mediator, and any
Israel-Hamas talks and by the U.S. President Donald Trump himself. Let's just talk about how significant that is. Timelines, obviously, you know,
not clear at this point, but the significance of these talks even being discussed again, Nic, please.
And the consequences given what is going on in Gaza. Just how important are these at this point?
[09:30:00]
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah, I mean, I think, Becky, if we sort of talk about Gaza, on the one hand, you can see how
Prime Minister Benjamin Netanyahu has had a bump in popularity with the outcome of the 12-day war with Iran and the ceasefire, that's given him a
bump, and it gives him some political maneuverability, maybe to make compromises he wouldn't -- wasn't previously prepared to take to this space
there.
I think, if we're talking about, what does it look like the overall, you know, potential nuclear deal with Iran, I think we have to look to the
diplomatic meetings that were happening on Friday and Saturday in Geneva and Turkey. And it's easy to forget those who with the momentum and
magnitude of what happened over the weekend and the ceasefire.
And the ceasefire coming into play, and the push and pull on who was responsible for overstepping it, et cetera. We go back to the weekend, and
there was diplomacy in play. And I think one of the reads on that diplomacy that was in place, certainly coming, I've been getting from sources in this
region, that a deal with Iran on enrichment is still something that there's a rough framework for.
And I think your last guest was alluding to, it doesn't look entirely dissimilar to what there was previously, if I heard correctly. So, but it
has more of a regional nature to it. A deal whereby countries in the region and can combine resources for an enrichment program that doesn't
necessarily reside in Iran is an idea that's been out there.
Whether or not that gains traction going forward is entirely unclear. Becky, but I think when you come to that question of Gaza, there is that
political space for Prime Minister Netanyahu to actually make some of the compromises that he hasn't been able to make up to now. And I think that is
potentially very significant, Becky.
ANDERSON: Yeah, because there is, of course, much debate about whether an off ramp and a political solution for Gaza and any potential deal between
the U.S. and Iran on its nuclear file really suits the Israeli Prime Minister Benjamin Netanyahu, does it?
ROBERTSON: Yeah, Becky, I'm sorry there was interruption there. Could you just ask me that question again? If you don't mind.
ANDERSON: It was just that, yeah, I was picking up off the back of what you had just suggested on what you were just discussing. There is much debate
about whether, you know, an off ramp, a political solution on Gaza. And for example, you know a potential U.S.-Iran deal on the nuclear file, whether
that actually suits the Prime Minister Benjamin Netanyahu.
After all, he has been accused in the past of scuppering Gaza deals, and with this latest operation on Iran scuppering, what were talks ongoing
between the U.S. and Iran?
ROBERTSON: Yeah, and I think trying to read that and understand it is difficult, because I think a lot of what we would want to know, Becky, lies
in that relationship between President Trump and Prime Minister Netanyahu and yesterday, for example, I believe it was early yesterday.
Was it the night before days? These past few days run together to a degree. But look, I mean, when President Trump was heavily critical of Prime
Minister Netanyahu for the last minute and last round of strikes on Iran that gave a clue to his impatience. And one of the trends and narratives
that's emerging from all of this is President Donald Trump likes to be seen to be the peacemaker.
He takes a lot of credit for forgetting Pakistan and India to step back from the brink of potential escalatory conflict just a month and a half
ago, and here is done the same thing again. He's got two sides to agree. As he said, have been fighting so long they've forgotten what they're talking
about.
So, if he really is on this drive and push for peace, has he opened a door with Prime Minister Netanyahu to execute pressure on him over Gaza, to get
something done there that Prime Minister Netanyahu has been utterly unwilling to go to so far. Look, you know, we understand that Hamas has
gone back to Egypt for talk with intermediaries there.
Qatar is indicating perhaps there's some open ground here. We just don't know what has happened is Becky, the ground has shifted. But I think a lot
of that nuance that you're asking about there is going to be in the dynamic between President Trump and Prime Minister Netanyahu.
[09:35:00]
But if the President of the United States is willing to pressure the Israeli Prime Minister as robustly as he has indicated over the past day or
so on Iran, then that means there could be some movement.
ANDERSON: Yeah, it's good to have you, Nic. Thank you very much indeed for joining us he is out of Tel Aviv in Israel, today. It is just past 09:30 in
New York. And just past 05:30 here in Abu Dhabi and the U.S. markets, of course, have just opened a stunning turnaround for U.S. stocks.
It has to be said, after what has been quite the wild ride in the last two months. Also, the latest on oil and interest rates --
(COMMERCIAL BREAK)
ANDERSON: Welcome back. I'm Becky Anderson in Abu Dhabi. You are watching "Connect the World". These are your headlines this hour. And U.S. President
Donald Trump is at the NATO summit in the Netherlands saying that he is backing the alliance all the way after NATO members agreed to increase
defense spending significantly.
He's also continuing to dispute U.S. intelligence report that says American strikes at a weekend only set back Iran's nuclear program by months. With
the ceasefire between Israel and Iran apparently holding an initial Israeli assessment of the U.S. strike says that they set back Iran's nuclear
program by two years.
Iran's Foreign Ministry says its nuclear installations were, quote, badly damaged in the U.S. and Israeli attacks. Palestinians continue to come
under Israeli fire in Gaza while trying to collect essential aid. Health officials in the enclave say nearly 50 people were killed over the course
of a day while they were waiting for food near distribution sites.
Well, let's do a little bit more now on this truce between Israel and Iran, it does appear to be holding. Iran's UN envoy has thanked Qatar for its
role in mediating that ceasefire and preventing a further escalation of violence. Qatar's Prime Minister says the missiles that Iran fired at a
U.S. Air Base in Qatar had left a scar on their relations, but that he thinks they will recover over time.
Well earlier I speak to Masjid Al-Ansari, the spokesperson for Qatar's Ministry of Foreign Affairs, about the impact this turbulent period has had
on Qatar and other Gulf nations.
(BEGIN VIDEOTAPE)
AL-ANSARI: They want that this regional escalation will reach us all, the Israeli attack on parks, which is 200 kilometers away from our offshore
facilities, the attack on -- air base, the Qatari Air Base that houses more than 10,000 U.S. servicemen and women, were both threats to our country
that would never have existed if it wasn't for this escalation that has taken place.
[09:40:00]
And the ability to reach the ceasefire, which is, as you said, thankfully, is still holding, is very important for all of us in the region.
ANDERSON: Masjid, how much notice was Qatar given about these Iranian strikes on the U.S. Air Base? And what's your response to these reports
suggesting that this was somehow coordinated with Qatar?
AL-ANSARI: Well, Becky, I can tell you very clearly, of course, there were intelligence information coming in about possible strikes on bases that
house U.S. servicemen and women in the region as a whole, as we have seen, you know, in Iraq and Kuwait and other places in the region.
And that, of course, would include other days. So immediately, we took precautionary measures by evacuating the base, because our main priority
was the safety of our people, the safety of the people who work on the base, and the precautionary measures were put in place.
Our air defenses were deployed, and we were absolutely ready. But that doesn't mean that it was not a surprise. It was unprecedented, and we did
not expect the Iranians to do this. At the same time that we are helping them with a lot of the regional issues through mediating between them and
Israel and them and the U.S.
We always operated, you know, with the Iran and good neighborly policies. And as the prime minister said, this is a scar on the relationship between
us and Iran. But we are willing to go forward, because our choice, our leadership choice, was always whatever that can be done to secure regional
security.
(END VIDEOTAPE)
ANDERSON: Masjid Al-Ansari speaking to me earlier, and you will hear for more from him in the hour to come. And we will be right back with more
after this.
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ANDERSON: Well in a stunning turnaround, the S&P 500 index is on the precipice of an all-time record. Oil prices back up from their recent lows
met after the Iran-Israel ceasefire deal. Let's look at these markets and they are settled into what is the Wednesday trading day 13 or so minutes
in.
And that is the story bit mixed today, but as I say, sitting on the precipice of an all-time high for the S&P and you consider just how much
volatility, just how much volatility there has been in that market since the beginning of April and Donald Trump's flip flops on trade and tariffs.
And then, of course, what we've seen over the last 12 days in the U.S. fight with Iran in support of Israel on its nuclear sites, it is
remarkable. The U.S. Fed says it is still too soon to cut interest rates. That's from Chair Jerome Powell and his semiannual report to Congress on
Tuesday.
He said the fed is well positioned to wait and more to come on this testimony, which will be keenly watched alongside the geopolitics of course
in the geo-economics around tariffs and trade.
[09:45:00]
Joining us now from London, Chief Economist for UBS Global Wealth Management, Paul Donovan. Paul, in fact, you and I have been speaking, I
think, for nearly 25 years, maybe 30. I'm not sure either you nor I have seen quite this sort of period of volatility over that time.
But correct me if I'm wrong, where do you want to start? Let's start with Jerome Powell and back into the geo politics and economic, power focusing
on future inflation as a reason to keep rates unchanged. What's your take for now?
PAUL DONOVAN, CHIEF ECONOMIST FOR UBS GLOBAL WEALTH MANAGEMENT: Well, frankly, it's a bit of a merciful release, because Powell has had this
mantra of data dependency, data dependency, which means he's always been looking backwards at old data, and I'm only going to move when the data
changes. Now, what he's saying is, actually, you know what?
Maybe it might be an idea as a central banker if I think about the future. Thank goodness. And so, he's saying, well, look, yes, inflation today is
low, but we know inflation is going to go up as President Trump's trade taxes hit. And then we are concerned that inflation may go up further as we
see second round effects, including another bout of profit led inflation.
So, we're going to have to anticipate that future inflation and keep rates higher for the time being. And I think it means ultimately that we're only
going to see rate cuts when the U.S. labor market starts to weaken.
ANDERSON: That's fascinating. There are those in the market who are opening that the further testimony we get Wednesday may actually suggest that
policy will be rates on hold for now, but going lower going forward, which really doesn't sort of support the -- of your argument here.
But there's always two sides to this, of course, oil prices pretty much holding steady over the promise of the Iran-Israel ceasefire. Again, what
do you make of what we've seen? And when we consider the context of inflationary pressures, what do you make of these recent sorts of moves,
and where are you expecting oil prices to sort of settle in the short to medium term?
DONOVAN: I think when we think about the oil market, what the oil market is doing is it's focusing on a degree of supply that is coming out of OPEC,
but it's also focusing on the likelihood of a slower U.S. economy this year, we've gone from soft landing to rather bumpy landing.
As far as the United States is concerned, we're basically going to get fairly stagnant growth in the second half. And of course, that makes a
difference. Now, what we had was sort of this interruption of geopolitical risk, but it was geopolitical risk that the markets have not, I think,
really taken that seriously, because they weren't pricing in the Israel- Iran conflict as then leading to disruption to oil supply, maybe to some shipping, but not to the oil supply.
And so, what we had was just a very short-lived spike in oil, and we're now back down to assessing the economic fundamentals, which I think is, you
know, more or less fairly priced at these levels.
ANDERSON: Yeah, and nothing's really changed. All right. Question to you, given that the NATO summit is ongoing at present, how will this significant
increase in defense spending announced today at the NATO summit affect markets investor sentiment? And how will all member states afford this new
5 percent annually? It's going to be tough.
DONOVAN: So, we've got a couple of issues here. The first thing is, obviously, yes, you are seeing an increase in government spending over
time. It's not immediate, but this is a fiscal stimulus over a period of years. The second question is one which I don't think is getting enough
attention.
Which is how much of this fiscal stimulus is going to be staying domestically, or at least within region, Europe plus UK, because I suspect
that an increased proportion of defense procurement is going to be focusing on Europe plus UK, and a diminishing proportion focused on buying equipment
from the United States.
So, the markets are going to be focused on that sort of double hit of fiscal stimulus to the economy. Both that has the potential to provide. How
do you pay for it? Well, there will be cuts in other forms of spending. That's already something that we're seeing, for example, in the United
Kingdom, where there are cuts in non-defense spending, but defense spending continues to rise.
But I think also we are looking at an environment where, yes, government debt has gone up, but we also have around the world absolutely record
levels of private sector wealth.
[09:50:00]
And about $83 trillion of that is going to be changing hands over the next 20 years. So, I think governments are going to be looking at ways of, shall
we say, mobilizing that wealth, either through taxation or through using that wealth to finance budget deficits. So, I think there will also be
quite a lot of examination of the wealth transfer that's coming along as a source of funding for general increased government steps over the course of
the next few years.
ANDERSON: Good to catch up with you. Always pleasure to get your analysis. Thank you very much indeed for joining us. And we will be right back after
this.
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ANDERSON: Well, at least 10 people are in the hospital in Nairobi and Kenya with gunshot wounds as thousands of Kenyans took to the streets, marking a
year since deadly anti-government protests. Last year, dozens were killed and hundreds were injured.
Demonstrators stormed parliament, angry over corruption, high taxes and police brutality according to a human rights commission. I spoke a few
hours ago with CNN's Larry Madowo who is in Nairobi.
LARRY MADOWO, CNN CORRESPONDENT: Becky, we're back on the street exactly a year since we saw the killings outside parliament. When I report on these
people who were shot, I don't say allegedly, because we were there and we saw security forces shooting unarmed civilians.
And what you see today is hundreds of people already in the cities of Nairobi who are back to complain about police brutality. And Kenyan police
have turned this into what looks like a war -- with tear gas, with flash bangs, with all sorts of violent looking scenes. What they're singing now
is -- which makes battle, and they say it will always be a battle.
Unfortunately, whenever this happens, police begin to fire tear gas, and what you see back here is police trying to make sure that they don't gather
in the city. Police have cordoned off the area of Parliament completely, so that protesters don't make -- you see over there, police fire and tear gas
indiscriminately, turning the City of Nairobi into what looks like a war zone.
And this is nothing to do with these largely peaceful protesters. They're carrying flags. They're carrying banners. They're saying the police that
don't need to be killed. But increasingly, the police react in violent ways. We're just going to get all the way here for the ambulance.
Whenever we see these ambulances, it's usually a sign that they're probably taking somebody who's been shot by the police. We've seen a few people
who've been shot today, giving live rounds, even though, police are literally -- last year -- last week, during protest against police
brutality, we saw more instances of police brutality.
A street vendor selling masks was shot at point blank range and is currently fighting for his life. That's why a lot of these young people
around here, they feel that the government or President -- does not listen to them -- last year --
[09:55:00]
ANDERSON: Larry is in Nairobi in Kenya. To New York now, where local politician Zohran Mamdani is the leading the Democratic primary for the
city's mayor, and it's against his top challenger, Former Governor Andrew Cuomo.
(BEGIN VIDEO CLIP)
ZOHRAN MAMDANI, NY MAYORAL DEMOCRATIC CANDIDATE: Today, eight months after launching this campaign with the vision of a city that every New Yorker
could afford. We have won.
(END VIDEO CLIP)
ANDERSON: Well, affordability has been central to the 33-year-old campaign promising New Yorker's free city busses, a rent freeze and higher taxes on
the wealthiest. However, since Mamdani's first round support is below 50 percent. There are still hurdles before he is anointed the Democratic
nominee. Well, that is the first hour of the show. Back with the second hour "Connect the World", after this.
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