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U.S. Envoy Heads to DC After Kremlin Meeting; Europe Strikes Deal to Phase Out Russian Natural Gas Imports; Follow-up Boat Strikes Draws Intense Bipartisan Scrutiny; Hegseth, Trump Distance Themselves from Double-Tap Strike; Israel to Send Official to Lebanon for Talks Next Week. Aired 9- 9:45a ET

Aired December 03, 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]

(COMMERCIAL BREAK)

BECKY ANDERSON, CNN HOST, CONNECT THE WORLD: Well, a live look at the White House for you, where President Trump is waiting to hear the message from

Vladimir Putin. That is envoys are bringing back from Moscow. It is 09:00 a.m. there. It is 06:00 p.m. here in Abu Dhabi.

I'm Becky Anderson from our Middle East programming headquarters. This is "Connect the World". Also coming up for you this hour, a U.S. deportation

flight is headed to Caracas. What that means about the safety of the skies over Venezuela as Trump and Maduro continue this geopolitical standoff.

And the story of a young man who went to get a bag of flour for his family and never came back. Many more cases just like here's a CNN special

investigation into the horrific fate of Gaza's missing aid seekers. The stock market in New York opens in about 30 minutes from now, 09:30 local

time.

The latest U.S. jobs data out in the last hour shows a weak jobs market. 32,000 jobs lost in the private sector. Markets may interpret that in the

context of the fed, meaning that the data may make a rate cut more likely. That may be the reason why we are seeing a slight fill up in these markets

today, but they are sort of steady as they go on.

The futures indicating a steady to positive start right back there later. Well, the word from the Kremlin today seems to be, let's keep talking after

marathon talks in Moscow between Russia's President and Donald Trump's top two negotiators produced no breakthrough or on a plan to end the war in

Ukraine.

Territory is the major sticking point. Moscow wants Kyiv to hand over land in Eastern Ukraine. For Kyiv, the message has always been, don't even think

about it. It's also worth noting, Europe is trying to get back in the game. It played no role in Tuesday's high stakes diplomacy at the Kremlin.

Now the EU is saying it will phase out Russian natural gas imports by late 2027 in an effort to deplete Vladimir Putin's war chest. Let's get you live

to Moscow and CNN's Matthew Chance. What are Witkoff and Kushner them taking home to Donald Trump from what were these marathon talks with the

Russian President, Matthew?

MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: Well, it's Becky, it's certainly not a sort of enthusiastic embrace of the U.S. proposals to

bring the Ukraine war to an end. I mean, look, there were some diplomatic niceties at the end of this five hour, nearly five-hour meeting behind

closed doors in the Kremlin.

Afterwards, Yuri Ushakov, the presidential aide to Vladimir Putin, came out and described the talks in pretty mundane terms as being useful and

constructive, helpful towards achieving a long-term peaceful settlement in Ukraine. But he also said that no compromises were reached.

He said there was no plans. There were no plans being made for President Putin and President Trump to meet anytime soon. So certainly, the Kremlin

did not wholeheartedly embrace that peace proposal and those plans, which are backed by President Trump, but they also didn't sort of rule them out

either.

You know, they're still going to continue talks as technical talks going to continue. And I think that's a sign of Vladimir Putin keeping his options

open. Because, you know, I think the message the Americans will have taken back is that if there is a peace deal, that can be delivering the Kremlin

everything it wants from its war in Ukraine, then the Kremlin is prepared to take it.

But I mean, Putin, his officials have said a number of times publicly that if they can't get what they want through negotiations, they're going to

push ahead and try and get those things on the battlefield. And I expect that's the message that Putin delivered to Steve Witkoff and Jared Kushner

in that closed door meeting.

ANDERSON: I'm interested in how the Kremlin views the European position and European sort of principles involved in this. After all, it does seem that

Europe is trying to reestablish its influence. What's your sense? Before I get to you, let's have a listen to Ursula von der Leyen earlier today,

Matt, and then you can respond.

(BEGIN VIDEO CLIP)

URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: This is the dawn of a new era, the era of Europe's full energy independence from Russia.

[09:05:00]

Many believe this would be impossible. Well, the figures speak for themselves, and let me give you some. Today, Russian gas imports so LNG and

pipeline are down from 45 percent at the beginning of the war to 13. Coal imports are down from 51 percent at the beginning of the war to now zero.

And crude oil imports are down from 26 percent to 2 percent today.

(END VIDEO CLIP)

ANDERSON: Has there been any reaction to the EU phasing out Russian energy imports and threatening to do more, Matt?

CHANCE: You can imagine, Becky, that the Russians are not happy of about that. I mean, energy exports from Russia to the European Union are a major

source of revenue for the Kremlin. And so, this will be damaging for the Kremlin and its ability to keep on funding its war in Ukraine and its other

funding obligations as well.

It's also a price for the European Union to cut off essentially cheap Russian energy from their own sort of consumers, their own markets. But

look, there's a -- I think on a broader level, there's a lot of criticism being leveled by the Kremlin towards the European right now, European Union

right now.

European countries basically saying that, you know, they're warmongers. They want to perpetuate the conflict to make the situation worse, that

they've blocked themselves out of the process of trying to find a peace deal, whereas the United States is sort of actively looking for a peace

deal.

And I think to some extent that plays into the Kremlin's hands, because it's been a long-standing policy, or, you know, kind of aspiration for the

Kremlin to try and drive a wedge in between the United States and the European Union, to try and separate that Western bloc to make them easier

to handle and to manage and to overcome.

And that does indeed, seeing exactly what is taking place now, the Europeans are adopting one strategy and stance towards the Kremlin, the

United States, a very different one.

ANDERSON: Good to have you, Matt. Thank you. Meantime, President Zelenskyy says that Europe -- the Ukrainian delegates, are preparing to head to the

United States to meet with President Trump's aides, and with no breakthrough in sight, Mr. Zelenskyy says it's clear President Putin is no

hurry to end the war.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE: Very difficult to comment the words of leader of Russia, because he really doesn't want finish this war,

because he didn't get all the goals what he wanted at the very beginning of this aggression, he wanted to destroy us totally, our freedom, our people.

But here really been very surprised.

(END VIDEO CLIP)

ANDERSON: -- Zelenskyy. Let's bring in CNN's Nick Paton Walsh who is in Ukraine's capital of Kyiv. And he's been providing analysis, important

analysis, all week for us. What are you hearing behind the scenes about the communication or lack thereof from these U.S. envoys who were in Russia

yesterday, and it seems now headed directly to Washington without a stop in Europe?

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: Yeah. We don't know exactly what has been occurring privately here. Zelenskyy, not

particularly forth coming, sounds not always entirely confident that he's completely in the loop indeed what is happening.

But we do know that prior to the meeting. He was fully briefed by Witkoff, and is obviously highly likely that if his team is now heading stateside to

continue the negotiation, that he's apprised of what came out of the Kremlin too. There is a question mark over to exactly where Steve Witkoff

is right now.

I would imagine he's headed back to the United States that Donald Trump, who's been silent on these talks so far, will want to be briefed by his

envoy to the conflict, but probably also too, Secretary of State and National Security Adviser, Marco Rubio, will want a hand in the U.S.

reaction to all of this.

But it was clear from hearing Ushakov emerge from these talks, referring to a 27 point or 28-point plan, and to four separate documents the Americans

delivered that they were essentially trying to hark back to an earlier version of the peace plan, first mooted that kind of sparked so much of the

anxiety here in Ukraine.

One cooked up by the Americans and Russians by themselves, then ameliorated by the Europeans and the Americans and the Ukrainians. Zelenskyy referring

to a 20-point plan just a couple of days ago, prior to these Kremlin talks getting underway. So precisely what it was that was presented to Putin that

he, in turn, did not embrace in full.

[09:10:00]

Remember, Ushakov said some bits were to their liking, some bits were not. And ultimately there was no compromise reached. This was essentially a

rejection of whatever compromises were in that 20-point peace plan. There may be work further ahead that can get them closer to where they need to

be.

And the silence we're seeing might be the result of some wider industry afoot, but I think it's fair to say now we're into a quite a confused

moment where the latest burst of deadlines from President Trump. Remember the Thanksgiving deadline that's now whizzed past into the distance that

sparked all this move.

And we're now not at a point where an immediate ceasefire or a deal seems in hand just further talks ahead of us. This essentially, I think, plays

into Vladimir Putin's wider goal here. They are the Russians gaining ground on the front lines without any doubt at all.

Pokrovsk, they claim, just two days ago, whether that's entirely true or not, it's pretty much borne out by much of the evidence on the ground that

they've got a pretty good grip on that strategic hub in the east Zaporizhzhia, other areas too, increasingly seeing Russian advances.

And we also have Zelenskyy here wrestling with the power cuts inflicted by Russian attacks on energy infrastructure, corruption scandal as well. It's

a bleak winter ahead, and one now that doesn't appear to have a particularly fruitful peace process is going to stop the fighting.

So, Putin, perhaps, I think, has been relishing the fact that Trump's key envoy, Steve Witkoff, his son in law, have made all the journey to Moscow,

waited for him for hours, and then, essentially, it seems, publicly, at least emerged empty handed. It's the U.S. pleading the Kremlin for peace,

ultimately, on their terms, and Putin not liking what is being served, Becky.

ANDERSON: Nick Paton Walsh is in Ukraine. More from you, Nick, as we move through the next couple of hours. Thank you. Let's connect you to

developments now in the showdown between the U.S. and Venezuela. And we are waiting to see when the U.S. may launch strikes within the country, after

Donald Trump said such attacks may happen, quote, soon.

Well, so far, Washington's pressure campaign is focused only on attacking boats that officials claim is carrying drugs. And both President Trump and

his Defense Secretary Pete Hegseth, appear increasingly defensive about a follow up strike on September the second.

And despite President Trump demanding Venezuela's airspace be considered closed due to increased military activity. A U.S. deportation flight is

expected to arrive in the country in the coming hours. Well, Stephen Collinson joining us from Washington, DC. Stefano Pozzebon is in Caracas

for us.

Let's start with you, communication, Stefano, between Washington and Caracas still open, it seems, at least, to manage these deportation flights

from the U.S. What can we read into that, if anything about the state of airspace over the country?

STEFANO POZZEBON, CNN CONTRIBUTOR: Yes, indeed, Becky, this flight arriving today here in Caracas, we understand it's going to arrive here later this

Wednesday afternoon. It's a flight managed by ICE so the U.S. government agency tasked with the role in deporting as many undocumented migrants as

possible, and coming down from Phoenix, Arizona, so directly from the continental U.S.

Well, that tells us quite a few numbers of things. Number one is that, yes, as you correctly pointed out, there is some level of communication. Despite

all of this confrontation between Washington and Caracas, there is some level of communication between officers from the Maduro government and

officers from the Trump Administration in coordinating these flights.

These communications have never ceased. We know that Trump did say that he wanted the Venezuelan air space closed on Saturday. However, as early as

Monday, so less than 48 hours after that tweet or post, as I should say, on Trump on Truth Social, the Trump Administration requested the arrival or

the authorization to have this flight land here in Caracas.

And the second one is frankly, points to the contradiction of the approach from the White House into dissolve Venezuelan situation with the commander

in chief threatening military action and even saying that strikes on Venezuelan's soil will start very, very soon, but at the same time, all too

happy to send American owned and the government managed airplanes directly into Caracas, if that means sending down undocumented migrants.

We understand that despite the -- rattling from the likes of the Department of State and other branches of the administration, deportation is the core

for the MAGA movement that is currently in power in the White House.

ANDERSON: Oh, I'm sorry. I thought we were going to listen to some sound there. Apologies.

[09:15:00]

Stefano, thank you.

POZZEBON: No --

ANDERSON: Stephen, let me bring you in as we wait for the next move in and around Venezuela, the focus, certainly in Washington, is still on that

double tap strike back on September the second. I want our viewers just to listen to what two Republican lawmakers are saying about that and the

situation about the Secretary of Defense, stand by.

(BEGIN VIDEO CLIP)

SEN. RICHARD BLUMENTHAL (D-CT): Hegseth trying to shift the blame and make Admiral Bradley the Fall Guy. Ought to be reason to ask for his resignation

or fire him.

SEN. RAND PAUL (R-KY): Secretary Hegseth said he had no knowledge of this, and it did not happen. It was fake news, it didn't happen, and then the

next day, from the podiums the White House are saying it did happen. So, either he was lying to us on Sunday or he's incompetent and didn't know

what had happened.

Do we think there's any chance that on Sunday, the Secretary of the Defense did not know there had been a second strike?

(END VIDEO CLIP)

ANDERSON: Stephen, what's your sense here? Could the administration face real consequences over this? I mean, what we hear here is some real

bipartisan criticism on this case?

STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: Yes, and it's unusual to hear Republicans speaking out against the administration and asking

questions, especially during this second Trump term, I would still color myself somewhat skeptical that the Republican Congress is going to make a

huge deal of going after the Trump Administration on this.

I think there are people in the Senate and the House service -- Armed Services Committee on the Republican side, who are sincere about finding

answers here, I don't believe there is a great deal of affection for Defense Secretary Pete Hegseth, but at the same time, Trump is Still

although he's very unpopular among most Americans.

He's still deeply unpopular among the base voters of the Republican Party. So, there is still not a great deal of political incentive for any

Republican who wants the future, including in the post Trump era, at this point, to stand up and start asking tough questions about the president.

Perhaps that's why they're setting up Admiral Bradley, who will appear on Capitol Hill this week as the fall guy, if there was proven illegality

here, but I don't think it necessarily threatens the president. There could come a time when Pete Hegseth, the Defense Secretary, becomes too much of a

political liability after a very checkered period so far at the Pentagon that the administration decides that it's ready to move on.

But the chances of the Republican Party in Congress really trying to hurt this administration are still, I think, quite low.

ANDERSON: Good to have you. Thank you. And in our next hour, I'll be speaking to Leopoldo Lopez, who is the leader of the Venezuelan opposition

party political will. He accuses President Maduro of being a coward and of hijacking justice in Venezuela.

So more on that next hour. Still to come this hour, they went out to see the basics of life during the war in Gaza. They never came home. A CNN

investigation reveals new evidence about what may have happened to them. That is up next.

(COMMERCIAL BREAK)

[09:20:00]

ANDERSON: Israel is sending an official to Lebanon next week for what it is calling an initial attempt to establish a basis for cooperation. Now, two

sources telling CNN that these meetings are part of a U.S. effort to prevent another escalation in hostilities between the two.

Israel has repeatedly attacked Southern Lebanon over the last year despite the ceasefire, and it has signaled that it may go even further if Hezbollah

does not take steps towards disarming by the end of the year. CNN's Ben Wedeman got a firsthand look at what's left of Hezbollah's infrastructure.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): These are the mountains from which Hezbollah, until a year ago, fired missiles into

Israel, but now under the control of the Lebanese army, who took reporters on a rare tour of parts of the south, normally off limits to the press.

WEDEMAN: We are entering a Hezbollah tunnel well up a rugged ravine. It took a very long time to get here. This is a tunnel that the Lebanese army

is telling us was not used for the storage of weapons, but rather was for personnel. Now it goes in deep, deep into this mountain.

WEDEMAN (voice-over): The Lebanese army says it is found 74 such tunnels as part of the year-old ceasefire agreement that halted the war with Israel.

The Lebanese army told reporters it has seized large amounts of weapons and ammunition and more than doubled its troop strength south of the Litani

River.

All part of an effort to reassert government authority in areas where Hezbollah operated.

WEDEMAN: This looks like it was the kitchen. Still food here, tins unopened. This clearly was serious operation. This was some sort of field

hospital or clinic. These are hospital type beds. We also saw other medical equipment in here, and there's a very unpleasant smell as well. We have

ventilation pipes, a water pipe.

WEDEMAN (voice-over): This tunnel appears to have been one of several in this area which Israel heavily bombed.

WEDEMAN: And of course, this is really how Hezbollah has fought Israel for decades. I've been to other parts of Southern Lebanon, where during the

1990s when they were fighting Israeli troops, inside Lebanon, they dug similar tunnels, had similar facilities. But things have changed.

Military technology has reached the point where it's very difficult to do anything without being seen by a side with superior technical abilities,

and that's certainly what we know Israel has had.

WEDEMAN (voice-over): Israel continues to target on an almost daily basis, what it claims are Hezbollah members and infrastructure saying Hezbollah is

rearming and regrouping. Hezbollah is holding its fire for now.

WEDEMAN: What matters is that Lebanon is under intense pressure from the United States to disarm Hezbollah before the end of this year. If it does

not do that, the threat is that Israel will start the war all over again.

WEDEMAN (voice-over): Ben Wedeman, CNN, South Lebanon.

(END VIDEOTAPE)

ANDERSON: Well, a CNN investigation based on video, satellite imagery and eye witness accounts, points to the Israeli military bulldozing the bodies

of Palestinians killed near an aid crossing in Northern Gaza. That possibility also backed up by evidence from whistle blowers from inside the

IDF who spoke to CNN.

Well, the result families in Gaza left searching for answers about loved ones who went missing while seeking essential supplies. My colleague Jeremy

Diamond reports from Jerusalem. And I have to warn you that you may find some of the video in his report disturbing.

[09:25:00]

(BEGIN VIDEOTAPE)

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (voice-over): My brother is missing. Anyone who saw or glimpsed him --

UNIDENTIFIED FEMALE: My cousin went missing yesterday in Zikim --

DIAMOND (voice-over): Ehab Adel Mansour, 16 years old, went missing in the Zikim area.

UNIDENTIFIED FEMALE: My son went missing while going to the aid area in Zikim on Sunday.

DIAMOND (voice-over): Messages from desperate families all searching for loved ones who went out to seek aid and never came back. 23-year-old Ammar

Wadi was one of them, last seen in June going to the Zikim crossing in Northern Gaza, where United Nations food trucks entered. His mother is

still desperate for answers.

NAWAL MUSLEH, AMMAR WADI'S MOTHER: I just want peace of mind, to know what his fate is. Even if he is a martyr, praise be to God. I just want to know

what happened to him.

DIAMOND (voice-over): Wadi's fate is still unknown, but a CNN investigation based on video, satellite imagery and eye witness accounts points to the

Israeli military bulldozing the bodies of some of those killed near the Zikim crossing. IDF whistle blowers who spoke to CNN also point to a

broader pattern of the Israeli military mishandling bodies in ways that could amount to war crimes.

Collecting humanitarian aid became a deadly reality in Gaza over the summer before the ceasefire took effect.

UNIDENTIFIED MALE: They killed him on the spot.

DIAMOND (voice-over): More than 2000 Palestinians were killed by Israeli fire while trying to get aid, according to the World Health Organization.

The Israeli military has acknowledged firing toward these crowds, but said it does not intentionally fire at civilians.

Hundreds, some dead, others still clinging on to life, were hauled away amid the mayhem, including here near the Zikim crossing, but amid the

clattering of gun fire, others were left behind.

UNIDENTIFIED MALE: Gunfire, death, killing, martrys -- so many martrys.

DIAMOND (voice-over): Six aid truck drivers told CNN they saw dozens of bodies near the Zikim crossing. One shared these photos showing partially

buried remains surrounded by aid boxes. Some said they witnessed Israeli military bulldozers burying bodies. They've asked us to conceal their

identities, fearing retribution from Israeli authorities.

There are bodies everywhere. Decomposed, skeletal remains. One truck driver told CNN. Some are covered with dirt because the army cannot tolerate the

smell of decomposing bodies, said another. I watched Israeli bulldozers bury the dead, said, a third. This video appears to show the aftermath of

Israel's bulldozing alongside a crushed, overturned truck, partially covered bodies of several Palestinians jut out from the earth.

A paramedic at the scene said rescue workers managed to haul away 15 dead Palestinians. With the ambulance full, some bodies had to be left behind.

CNN geo located the video to this location near the Zikim crossing. You can see the overturn truck here alongside bulldoze roads and track marks left

by heavy machinery or armored vehicles.

These are the roads where crowds of starving Palestinians swarmed aid trucks on a near daily basis, where they were fired upon and at times

killed by Israeli gun fire. We geo located multiple videos of people being shot and killed to these bulldozed areas. The same areas where Palestinians

said some bodies were left behind in the chaos.

On August 9, 31 hours after crowds are seen here, evidence of fresh bulldozing appears in the exact same location. This video shows just how

close Israeli forces, including this D9 bulldozer, were to those crowds. The soldiers came in front of us, eyes to eyes, and the quad copter was 10

meters away from us.

They were shot in front of us, and there is a martyr that stayed over there, and no one could get close to him. We begged the soldiers to carry

him back, but they didn't allow us. We provided the Israeli military with GPS coordinates for the locations where bodies were likely bulldozed and a

detailed list of questions.

The military said bulldozers positioned in the Zikim area are, quote, used for operational purposes to deal with IED threats and for routine

engineering needs. It denied they were used to remove bodies, but did not address questions about burying them. The military also declined to

describe its protocol for dealing with bodies in Gaza.

The Israeli military's apparent improper disposal of bodies of Palestinians stretched far beyond Zikim.

[09:30:00]

We spoke with two Israeli soldiers on condition of anonymity due to fears of retribution, both described bodies of Palestinians being buried in

shallow, unmarked graves in different parts of Gaza.

UNIDENTIFIED MALE: Essentially, the idea was to shove the body with a bunch of dirt clearing the road and push it to the sides.

DIAMOND: And that was it.

UNIDENTIFIED MALE: That was it. Yeah.

DIAMOND: The grave was not marked.

UNIDENTIFIED MALE: No.

DIAMOND: There was no identification process or notification process to any international or Palestinian organization.

UNIDENTIFIED MALE: Not that I was aware of, not in my unit. So essentially, we were never given any protocol or any order of how to handle any bodies.

There was never once that anyone told us, if you have a body, this is what should be done.

DIAMOND (voice-over): By allowing the dead to become the missing, international law experts say bulldozing bodies into unmarked graves can

violate international law. And if those bodies are mutilated or desecrated, the practice can rise to the level of outrages upon personal dignity, a war

crime under the Geneva Conventions.

As for Ammar Wadi, about a month after he went missing, in late June, his phone was returned to his family. A message had been left on the home

screen, forgive me, mom, if anything happens to me, whoever finds my phone, please tell my family that I love them so much.

A message that reads like a young man's final words. Words that are impossible for a mother to accept without a body to bury. Jeremy Diamond,

CNN, Jerusalem.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ANDERSON: Welcome back. I'm Becky Anderson in Abu Dhabi. You are watching "Connect the World". Time here is just after half past six in the evening.

The opening bell on Wall Street is just run about three minutes ago. So, let's take a look at how these markets are kicking off the trading day

today, slightly lower for you, the indications were steady to a little higher.

So, these markets not quite doing what the futures markets had done. And we want to talk about why investors are feeling. What feels like decidedly

edgy at this point, Wall Street optimistic, it seems about a highly anticipated rate cut next week by the Federal Reserve.

And the roller coaster ride continues for Bitcoin after Monday's big sell off. It is now trading here, but not significantly higher. Look, both of

these coins have been significantly lower of late. And cryptocurrency has regained all of its losses on the week, but it is still trading well below

its record highs.

[09:35:00]

So, I want to talk the fed. And I want to talk crypto with my next guest, who says investors consider it a deal done or a done deal that we will see

at rate cuts this month. What about after that picture, a lot less clear, it seems, from our next guest, Mohamed El-Erian is a regular guest on this

show.

Good friend of the show. Chief Economic Adviser for Allianz joining me now. You expect a rate cut from the fed next, why?

MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER FOR ALLIANZ: I do. And that's the overwhelming market expectation, over 90 percent and the reason is because

of the labor market, today we got the ADP data for November that shows a significant loss of jobs concentrated in small companies.

And in terms of sectors, it was evenly distributed between goods and services. So, we do have one indicator after the other of a weakening labor

market.

ANDERSON: Looking a little bit forward and into next year and the first and second quarter. What are you expecting out the fed in terms of a new

chairman and in terms of an overhaul, which you have said a number of times, is sorely needed?

EL-ERIAN: Yeah, so in terms of the immediate policy measures, so for January and thereafter, it's going to be a mess. It's going to be a mess

because this is a highly data dependent fed and the data is mixed. On the one hand, the job market is weakening.

On the other hand, inflation is proving sticky at full percentage points above its target. So, they're going to be torn.

ANDERSON: Yeah.

EL-ERIAN: And you see this in -- the second reason why is they have different sensitivity to the dual mandate. Is it inflation they should

worry about, or is it employment? And third, the chair is in a lame duck situation. So, it's very hard for Chair Powell to impose his authority, but

the fundamental issue is we need to look beyond that.

This is an institution that has stagnated intellectually. The people urging for reforms is a very long list, and the expectation is, whoever is

announced to replace Chair Powell will not only want to but have to undertake significant reforms to the central bank, and it is the world's

most powerful central bank.

ANDERSON: Yeah, I know it's fascinating, isn't it? Look I said I wanted to talk about the fed. I also want to talk about crypto. Bitcoin has seen

intense swings in recent weeks. Ether losing almost 9 percent between Sunday and Monday as well. Both have made up these losses, nowhere near the

record highs, though, that we saw on both some months ago. What is going on?

EL-ERIAN: What is going on is that the tourist investors, the ones that come in and go out, dominate the resident investors, which are the

institutional investors and those who deeply believe that crypto is the answer to quite a few of our problems. So, you have an upside-down pyramid,

Becky.

It's as simple as that. The base of resident investors, those who are committed to the asset class, day in and day out, is much smaller than the

base of the speculative investors who come in and out. So, you get overshoot on the way up. You get overshoot on the way down, very different

than where you what you see in gold, where the adjustment was limited, because the long-term holders are much bigger than the speculators.

So, it's the upside-down pyramid of those who invest in crypto that's the main reason why we're seeing this volatility.

ANDERSON: What do you expect for 2026 on crypto? I've just been talking to a number of sorts of key players in the crypto and blockchain market.

They're talking about the sort of emergence and excitement around real world assets at this point when we're talking about cryptocurrencies.

What's your sense?

EL-ERIAN: I think they're right. I think we're going to see a broader and deeper adoption. Broader means more institutional investors are going to

come to this market, and deeper meaning it will impact many more things in the payment system. Having said that this is not going to replace and

become the dominant currency, this will be a significant part of the ecosystem, but it will remain highly volatile.

[09:40:00]

And I keep on warning people understand that this market is yet to establish a broad enough base of institutional investors to dampen

volatility.

ANDERSON: Yeah.

EL-ERIAN: So, if you participate in this market, you're participating in a very volatile market.

ANDERSON: Got it. Good to have you as ever, thank you. And we will be right back.

EL-ERIAN: Thank you.

(COMMERCIAL BREAK)

ANDERSON: Well Man City Manager Pep Guardiola joked that he was losing his hair this after watching his side almost let a four-goal lead slip against

Fulham on Tuesday. "World Sport" has the details on that and more after this short break. I'm back with 15 minutes time with more "Connect the

World". Stay with us.

(COMMERCIAL BREAK)

[09:45:00]

(WORLD SPORT)

END