Return to Transcripts main page

Connect the World

Supreme Court Backs Trump on Mail Voting Restrictions, for Now; Firefighters Make Progress Containing Wildfire Near Reno; U.S.-Canada Trade Tensions Further Rattle Bond Markets; Bessent Suggests Bond Market Support Could Be Expanded; Hailstorm Halts Cyclists During Stage 3 in French Pyrenees. Aired 9-9:45a ET

Aired August 25, 2026 - 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: From fresh threats to Iran to a renewed trade war with Canada, and our President Trump's policies with

waging war with America's economy. It's 09:00 a.m. in Washington. It is 05:00 p.m. in Abu Dhabi. I'm Becky Anderson.

You're watching "Connect the World". Also coming up, crews battling to gain ground against the massive wildfire near Reno, Nevada. We'll get the very

latest on their efforts. Plus, deported to a place that they have never even heard of. CNN speaks with migrants who were sent to a country the U.S.

State Department urges people not to visit.

With 30 minutes to go to the opening bell on Wall Street, U.S. futures are looking higher as Brent crude retreats below $90 a barrel. Well, the U.S.

Treasury Secretary calls it a warning shot. Scott Bessent vowing the U.S. will crack down on countries that buy Iran's already sanctioned oil.

A day after he said Iran would face an economic D-Day. Bessent did not name specific countries that could face punitive U.S. measures, and he did not

offer a timeline. But his threat puts China front and center for possible U.S. action. Analysts say China buys roughly 90 percent of Iran's exported

oil.

Well, at his news conference on Monday, Bessent was asked by CNN's Kevin Liptak why he remained vague on details after the quote, D-Day threat. Have

a listen.

(BEGIN VIDEO CLIP)

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: You describe this as an economic D-Day, but D-Day wasn't a threat of an invasion, and the U.S.

didn't give a timeline to Germany. So, why not impose the sanctions today?

SCOTT BESSENT, U.S. TREASURY SECRETARY: Well, we are giving everyone the opportunity to remedy bad behavior. Why would I want to blow up the global

financial system? We believe that it is important to level set and give people a cure period, but they should know that, that will move very

quickly and that we are serious.

So, we believe that a warning shot and a level set of expectations is appropriate.

(END VIDEO CLIP)

ANDERSON: Well, Kevin Liptak here with us this hour. I'm also joined by Nada Bashir in London. Kevin, let's just start with you. His critics

suggest this simply an empty gesture from the treasury secretary, dressed up in fancy clothes. Your sense?

LIPTAK: I mean, I think if the treasury secretary follows through on what he previewed yesterday, this would be a significant step towards isolating

Iran. But the problem is, one, he doesn't sound particularly willing to do that at least yet. He says it would blow up the entire global financial

system, which at a politically precarious moment for President Trump and for the global economy, is not something that he sounds likely to do, at

least in the near term.

I think the other issue with the plan, as laid out yesterday, is that it will require complete buy-in from many, many other countries, including

China, but also the United Arab Emirates and Turkey and India and all of the other major trading partners with Iran that the U.S. is now relying

upon to isolate that country.

And you know the U.S. has been trying something like this for many, many years that has tried to crack down on Iranian oil, on the shadow fleet, on

banking through third countries, and they haven't had this success, at least in terms of degrading the Iranian regime. And so, it does seem as if

that the plan still requires a number of other steps, including by these third countries, before having a real impact on the regime there.

And so, I don't know that the plan as laid out is necessarily going to have an immediate effect. I think the other issue, and this has more to do with

the president's initial intention in all of this, is that a lot of the steps that he's laying out would affect the Iranian people and not

necessarily the Iranian regime.

Things like cracking down on aviation or banking. These are steps that could really impact the Iranian population far more than the government.

[09:05:00]

And when the president, you know, remember the initial impetus for all this at the beginning was to try and assist the Iranian protesters. He said that

help was on the way, and even today, the president says on Truth Social that there's a humanitarian crisis underway inside of Iran.

None of the steps that were laid out yesterday would alleviate that, and in fact, they could potentially aggravate it even further. And so, I think

there's still a lot of questions about what exactly this plan would look like if, in fact, it ever goes into effect. But I do think it does shows,

the president and his administration still kind of casting about for ways to get the Iranians to capitulate to the demands that they laid out at the

beginning of this war.

ANDERSON: Let me bring Nada in at this point. Iran says it is fully prepared to counter any U.S. action against countries who do business with

Tehran. But what does China have to say about this wider U.S. threat?

NADA BASHIR, CNN CORRESPONDENT: Well, Becky, as Kevin mentioned, this plan proposed by the Trump Administration does require a significant amount of

buy-in from these key trading partners with Iran. Of course, China, as you mentioned, Becky, is one of those top trading partners purchasing as much

as 90 percent of Iran's oil exports.

And we have had a statement now today from the Chinese Foreign Ministry spokesperson warning that this is only going to further intensify tensions

in the region. That this could lead to spillover risks, not only in the region but further afield as well. I'll just read you a little bit from the

statement we heard today, saying China's cooperation with Iran has always been conducted within the framework of international law and should not be

disrupted or undermined.

And then the spokesperson did go on to say that China will take all necessary measures to firmly safeguard its own rights and interests. Now,

of course, we did hear from the U.S. Trade -- Treasury Secretary declining to comment on whether the U.S. would specifically target Chinese banks.

And of course, this is all quite a bit of a juggling act trying to maintain those delicate relations between the Trump Administration and the

government in China. But of course, we have also been hearing very stark and stern rhetoric from the Iranian regime, as you mentioned, saying that

they have long been preparing for similar measures to be taken by the Trump Administration.

This is a country, of course, that is no stranger to sanctions imposed by the United States. But the concern is that this could further cripple the

economy in Iran, and, of course, as we've been hearing, impact the Iranian people more than it actually impacts and degrades the Iranian regime and

its military capabilities.

And of course, we are talking about trading partners with Iran that are also countries which have strong links with the United States. For example,

the United Arab Emirates and other Gulf nations. Whether we see any shift on that front, of course, that remains to be seen.

And Iran has also, for its part, been very clear. We've been hearing from Iran's parliamentary speaker saying that the U.S., the Trump Administration

should not be under any illusions that the Iranian regime will only stick to defensive measures, that they may begin to take offensive measures or

deepen their offensive measures in targeting the United States.

We have, of course, previously heard warnings that this could be totally stopping the amount of oil coming through the Strait of Hormuz, but of

course there may be further measures taken in the region as well.

ANDERSON: Thank you, Nada. And as both of you have reported then, Bessent avoiding calling out specific countries in his address, but he was asked

specifically about the UAE. Have a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's been some reports that the United Arab Emirates is among some of the first nations to take seriously these words from the

United States to cut off all business interactions with Iran. Is UAE leading the way in this respect?

BESSENT: I would think that the actions that they took last week were not coincident, but likely causal. And I would expect that we would see a broad

array of countries taking similar actions as we continue our engagement. The UAE have been very good partners, and have taken the brunt of the

Iranian attacks in the Gulf.

(END VIDEO CLIP)

ANDERSON: Well, Advisor to the UAE President Anwar Gargash, posting on X quote, Iran's aggression has only deepened Tehran's predicament and

weakened its position, and he goes on to say the path out of this war does not lie through targeting the Arab Gulf states, but rather working with

them.

There's even more on this story online, including this angle about how Iran is numb to economic pain.

[09:10:00]

In it, Mostafa Salem and Leila Gharagozlou, colleagues of mine here in CNN, Abu Dhabi, write, quote, even though the Iranian government has expanded

domestic production while operating its sophisticated network of front companies to procure essential goods largely from China, the Islamic

Republic has demonstrated that it can transfer the sanctions burden onto an already struggling population.

And they go on to argue that Iran is blaming the bleak economic picture on the war, and it might be Trump who is facing greater domestic pressure. You

can find that much more at CNN Digital, of course, and I share much of the analysis from this region on my socials @BeckyCNN.

Well, the U.S. Supreme Court is allowing President Donald Trump's executive order restricting mail-in voting to move forward, at least for now. But

Monday's ruling doesn't end what has been this long legal fight. Further challenges could delay or limit the administration's plans.

And it's still unclear how much of the policy could take effect before the midterm elections in November. Still, the decision gave President Trump a

procedural victory on an issue that has long been central to his political message.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: The cheating on mail-in voting is legendary.

Mail-in ballots are inherently corrupt.

Mail-in voting means mail-in cheating. I call it mail-in cheating.

You can never have a real democracy with mail-in ballots.

Mail-in ballots are a big fraud.

It gives people more time to vote illegally, let's say.

We, as a Republican Party, are going to do everything possible that we get rid of mail-in ballots.

Any time you have mail-in voting, you have corrupt elections.

(END VIDEO CLIP)

ANDERSON: Well, CNN's Alayna Treene, following the story for us from the White House, is a really important one, given that we are just a couple of

months out from the midterms, of course. So, what exactly did the Supreme Court decide on Monday, and what happens next?

I mean, could this case come back before the Supreme Court ahead of those midterms?

ALAYNA TREENE, CNN WHITE HOUSE CORRESPONDENT: Yeah. Look, as for what exactly the Supreme Court said, Becky, they did not rule on whether or not

this executive order that was issued by President Trump back in March, whether or not it was inherently legal or not.

I just remind you what that order said. It basically issued back in March when it was issued back in March, told the Department of Homeland Security

to come up with a list of eligible voters, and then told the U.S. Postal Service that you are only allowed to send mail-in ballots to and from those

eligible addresses.

Now, a group of 23 Democratic states and Washington D.C. essentially sued the Trump Administration over this, saying that's not constitutional. It is

up to states under the Constitution to determine how elections are conducted. However, the Supreme Court did, as you mentioned, Becky, give

the Trump Administration a procedural win here, though it is temporary.

They essentially said, look, it's too early to determine whether or not this is legal or not. It's too early to say how this would actually work in

practice. And so, all to say, to the second part of your question, it's not really clear whether or not this is going to be implemented in time for the

November midterm elections.

I actually think, you know, talking with legal experts, it's unlikely that all of this is going to be settled by then. This is just the beginning of

some of the legal battles. A lot of court fights ahead, but temporarily, they are saying that this can move forward. It's just a question of whether

or not the states will ultimately get enough proof or enough.

You know, if they have enough evidence to show that actually this is going against what the Constitution lays out, what states are allowed to do

versus what the federal government is allowed to issue.

ANDERSON: Good to have you. Thank you. And more on that, of course, as we get it. Well, to the U.S. State of Nevada, where crews are now making

headway in battling the Hawk Fire there that has ravaged the state for days. Firefighters have contained 27 percent of the blaze, about quarter

downgrading evacuation orders for thousands as of Monday afternoon.

But the upcoming forecast, with dry conditions and strong winds, could still spell trouble. Marybel Gonzalez is on the ground in Nevada, and she

joins us with the very latest from Reno. Marybel.

MARYBEL GONZALEZ, CNN CORRESPONDENT: Hi Becky. Yeah, some good news there as officials are making some headway on this fire, but we're not all in the

clear. Right here, we are right alongside the highway here, 395. Now this is a major and an important corridor that connects the states of

California, Nevada.

That have remained closed yesterday, but is now reopened. However, what we are seeing still are many evacuation points and road blocks, just like this

one.

[09:15:00]

We have seen members of the National Guard, law enforcement, members of the Department of Transportation. They're basically stopping anyone from

getting in by car. We've seen some residents trying to get back into their homes, but they're not able to do so at this time because there's still

some danger from those fires, and they have yet to assess that as well.

Right behind this checkpoint, actually at a very short distance, is a neighborhood that was affected by these fires. Right now, we know that in

total, there's at least 32 homes that have been destroyed, but that number is expected to go up. And we know that there are homes that have not --

have been not impacted at least on the outside from these fires, but they are without power.

Now, we spoke to one person who went back yesterday to check out just how badly the home his parents lived in was affected by these fires. Now theirs

was seemingly untouched on the outside. There was some property damage surrounding it, but then other neighbors of theirs did not have the same

fate. Let's take a listen.

(BEGIN VIDEO CLIP)

JESSE TAYLOR, RENO RESIDENT: My dad saw at the neighbor. 10 minutes later, after he called me of it being at the water tower, it had made it to our

neighbor's house, and he said the neighbor's house is on fire, and I can't breathe anymore. I got to go, and so that's when we just left, or he left.

Everybody that I know has their houses stayed up, but there's a lot of houses that have been lost out here a ton, and it's super depressing.

There's so much loss out here, and I feel so bad for everybody.

(END VIDEO CLIP)

GONZALEZ: That's the reality for so many residents here. There are still thousands of people who remain evacuated. Some of those evacuations have

been downgraded, and some people are able to go back, but again, in certain areas like this one, they're still not allowed to go back and see just how

much their homes were affected.

Now, officials are saying that this fire is human caused. However, they're not saying what exactly was the cause of this fire and if that was done

intentionally. Of course, right now they're keeping a close eye on especially dense areas with brush and vegetation because with the wind

picking up, that could definitely pose a challenge for firefighters trying to combat this fire, Becky.

ANDERSON: It will be. Thank you. All right, you are up to scratch on what is going on there in Reno, Nevada. And you are watching "Connect the World"

with me Becky Anderson. Still to come this hour, several asylum seekers in the United States have been deported to one of the most dangerous countries

in the world, and many have nowhere else to go.

A special report on that, is up next.

(COMMERCIAL BREAK)

ANDERSON: The Trump Administration's immigration policy involves so-called third-country deportations, when migrants are sent from the United States

to countries other than their own.

[09:20:00]

Well, just months ago, I sent their first deportation flight to the Central African Republic, one of the most dangerous countries on earth. My

colleague CNN's Isobel Yeung traveled there to investigate.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I was so scared. I was crying, and I said, I'm not going out.

ISOBEL YEUNG, CNN CORRESPONDENT (voice-over): Asana (ph) thought she'd find safety in the U.S. She says she fled Turkey after facing death threats, but

then she became one of thousands that the Trump Administration has deported.

UNIDENTIFIED FEMALE: First, my hands and with my belly like this, and my foot.

YEUNG: So, they handcuffed you and shackled you.

UNIDENTIFIED FEMALE: Yes.

YEUNG: And you still didn't know where you were going.

UNIDENTIFIED FEMALE: I don't know where I'm going to. I said, where we are going? Tell me. And he said, I don't know. Maybe Central Africa. And I was

in shock.

YEUNG: Have you ever heard of Central African Republic before?

UNIDENTIFIED FEMALE: No.

YEUNG: So we are here in Bangui, in the Central African Republic, trying to find out what happened with this I.C.E. deportation flight that took place

this summer, going from the U.S. to here, we know that this flight happened in the shadows of secrecy. As far as we know, no one apart from U.N.

agencies has managed to meet with these migrants, so we're here trying to track them down.

YEUNG (voice-over): At 08:58 p.m. on June 11th, 18 migrants from all over the world were brought to Alexandria Airport, Louisiana. They say they were

handcuffed and shackled. Several claim they were severely beaten. Two of the migrants say they were forced into a full-body restraint, like the one

seen here in a demo video.

A U.S. official called the allegation a flat-out lie and denied anyone was beaten. The maker of one such restraint said it's a last resort tool

intended to promote safety and prevent escalation. Nearly 20 hours later, after a refueling stop, the plane touched down in Bangui, Central African

Republic.

YEUNG: Maybe I can just start with where are you from originally?

UNIDENTIFIED MALE: I'm from Georgia.

YEUNG: You're from Georgia?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Egypt.

YEUNG: Egypt.

UNIDENTIFIED MALE: Afghanistan.

YEUNG: Afghanistan.

UNIDENTIFIED MALE: Iraq.

YEUNG: Iraq.

UNIDENTIFIED MALE: Jordan.

YEUNG: Jordan. So, all different countries. How are you all doing here?

UNIDENTIFIED MALE: Doing here? Like hell.

YEUNG: Like hell?

UNIDENTIFIED MALE: Yeah. No internet, no electric, too much mosquitoes, everybody's had malaria.

UNIDENTIFIED MALE: [The police] detained us and then demanded money from us. Since that day, we have not left the building.

YEUNG (voice-over): The U.S. State Department warns people do not travel here for risk of kidnapping and terrorism, and advises those who must to

leave behind a DNA sample so they can be identified by their family.

YEUNG: A lot of the migrants have told us that they are terrified to be here, and you can understand why. I mean, this is a country where there's

been an ongoing civil war that's still taking place. But even here in Bangui, there's very high rates of violence, very high rates of

criminality, and very high rates of you know these armed groups operating here.

YEUNG (voice-over): I asked the police about the migrants' claims that they are part of the problem.

YEUNG: Some of the migrants here that I've spoken to say that when they go outside, the police stop them and ask them for cash and threaten them.

UNIDENTIFIED MALE: No, no, those police officers are checking who those people are. I don't believe they're asking them for money.

YEUNG (voice-over): Very little is known about what terms the CAR government agreed to with the U.S., but what we do know is that on May

18th, just one month before the first deportation flight, State Department diplomats traveled here to meet with the president.

For the past decade, the U.S. has given just a few million dollars per year to the U.N. Migration Agency IOM's operations in CAR. But this year, that

figure shot up to 85 million dollars. An additional 50 million dollars was committed to the CAR Humanitarian Fund.

We asked the IOM about the money they're receiving. They did not respond to our specific questions, but told us that IOM has a long-standing presence

in the CAR and they're receiving funding from a range of donors. But this is at a time when the Trump Administration has been slashing billions of

dollars in foreign assistance.

YEUNG: We have been trying to get hold of any U.S. officials to talk about what's been happening and why and how they've sent these migrants here,

because they are ultimately the ones responsible. I mean, the State Department have emailed back saying, as a policy, we do not discuss

diplomatic negotiations or funding mechanisms, and the U.S. embassy staff have not been replying to us.

But we're going to try and knock on the door just to see if they answer. So, we just have some questions about the migrants that were brought here?

UNIDENTIFIED MALE: All questions have to go through them. I'm not authorized to answer any questions --

YEUNG: Right. And is there anyone else we can contact at the U.S. Embassy?

UNIDENTIFIED MALE: The Bangui PD at state.gov the email I gave you. That's when --

YEUNG: Who are were just going to ignore us and pretend that email never came. Alright. Thank you.

[09:25:00]

YEUNG (voice-over): Eventually, the State Department did get back to us. They did not reply to any of our detailed questions, but said the U.S. will

use foreign assistance to support countries that help us achieve our immigration priorities. It's a tacit admission that the money is tied to

the deportations.

The U.S. government does have a responsibility towards these migrants. Most of those we spoke to here have protection orders from American judges

stopping the government from sending them to their home countries, where they're likely to face persecution, torture, or death.

Fidele Gouandjika is a Special Adviser to the CAR's President. He also hosts a local radio show.

YEUNG: As you know, nothing happens in this country without little sweetener. It's a little bit difficult to believe that zero money was given

by the U.S. to Central African Republic. I mean, this is one of the most corrupt countries in the world, as you know.

FIDELE GOUANDJIKA, SPECIAL ADVISER TO THE PRESIDENT OF CENTRAL AFRICAN REPUBLIC: I do not believe the government could be corrupt, I would not

want to think for a single second that the Americans or Donald Trump are acting as corrupters.

YEUNG (voice-over): Fidele Gouandjika, what's happened to these migrants is a sign of American cruelty.

YEUNG: When a powerful country like the U.S. comes knocking and asking for this help, is it difficult for a country like yours to refuse?

GOUANDJIKA: What saddens me about the United States, a superpower with all the resources could keep these migrants there and they send them here to us

instead. The United States is a superpower, but it is a power without a good heart.

YEUNG (voice-over): Perhaps most concerning of all are those who have nowhere left to run to, like this young pro-democracy activist from Iran,

who says she faced possible execution for partaking in protests. Initially, she was overjoyed when she arrived in the U.S.

UNIDENTIFIED FEMALE: I was too much happy. The America, one of the best countries in the world, and I say it's OK. Now I'm safe, and I can make one

new life here. I know if I was in Iran, they going to kill me.

YEUNG (voice-over): Earlier this year, Trump himself encouraged Iranians to keep protesting, promising help is on the way.

UNIDENTIFIED FEMALE: Every time I think they going to protect me, but America not protect me. When they send me here, really, I lose my hope

again.

YEUNG (voice-over): Isobel Yeung, CNN, Central African Republic.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

[09:30:00]

ANDERSON: Well, we are watching the opening bell on Wall Street and bringing it in today, the government of Puerto Rico promoting economic

investment in the island. Well, the U.S. markets then open. Let's get a look at the Dow Jones up by about four tenths of 1 percent.

And we will get a look at what the other two markets are up to as they settled. But futures were certainly indicating a better start across the

board this Tuesday. Wall Street, though, of course, is watching for Canada's next move today. Ottawa is expected to announce its response to

President Trump's tariffs as the trade dispute between the neighbors escalates.

The move comes after the U.S. imposed new 50 percent tariffs on roughly 20 billion dollars' worth of Canadian goods. That was over the weekend.

Canadian Prime Minister Mark Carney initially vowed $1 for dollar response, but says Canada may take a more targeted approach to maximize the impact.

Ottawa also expected to announce measures to help protect Canadian businesses and workers from the impact of these tariffs. Well, the

deepening U.S.-Canada tensions have been rattling bond markets, as well as higher tariffs, of course, raise concerns about inflation and about

borrowing costs last week.

The U.S. Treasury announced that it would at least double its bond buybacks, an effort to help cap long-term yields and, to an extent, calm

investors. Let's talk with Joe Brusuelas who is Principal and Chief Economist at RSM. Joe, I actually want to start there because on the bonds,

the Treasury Secretary Scott Bessent's argument is basically the bond buybacks will increase market liquidity and avoid spikes in borrowing

costs.

I mean, we know how much debt the U.S. is carrying at this point, and higher rates, of course, a disaster for the Trump Administration, and

indeed for those who've got flexible mortgages. So, is that working?

JOE BRUSUELAS, PRINCIPAL AND CHIEF ECONOMIST AT RSM: No, it's not. And I'm going to use the words of Stan Druckenmiller, the American financier, who

is Mr. Bessent's mentor. One can't buy one's way out of a solvency conversation with a liquidity tool.

We've seen two verbal interventions in the market in twice as many weeks, and right now the bond market is simply saying no. That's not going to do

it. You know, this is just what I call half measures. The truth is, the United States needs to extend in the deep conversation around what I'd call

fiscal consolidation.

There's going to need to be tax increases, a new tax source. There's going to need to be a slowing in social military spending and/or outright cuts in

either those or profound social obligations. That's the only way you're going to drive yields down on a sustainable basis when you have an economy

that's outperforming, when you have an economy where it's at full employment, and when you have an economy where inflation's been running

above target for the past five years.

ANDERSON: I just want to hear from the Former Treasury Secretary Janet Yellen. She spoke to my colleague Richard Quest last night, and she pointed

out that the intervention in the bond market didn't address the fundamental issue. Let's hear from her.

(BEGIN VIDEO CLIP)

YANET YELLEN, FORMER U.S. TREASURY SECRETARY: I think what treasury and the administration should be thinking about is the fact that bond market

purchasers are now focused on the entire fiscal outlook? The United States budget deficit is very large, almost 6 percent almost unheard of, except in

a deep recession or during a war.

I think the administration should be focusing on how we can get our fiscal house in order, changes in taxation or in spending on entitlements that

would put us on a sustainable path.

(END VIDEO CLIP)

[09:35:00]

ANDERSON: So, I think she's echoing effectively what you have just laid out. What does that sustainable path look like? And does this

administration, which has two years left to run, just less, care at this point, what a sustainable path would look?

BRUSUELAS: OK, three things. A sustainable path is not a 6 percent debt deficit to GDP ratio. It's well below 2 percent. What you want is growth in

the deficit to be lower than growth in the economy. Now that would take several years to achieve. Second, the United States government needs to put

its primary budget on a path to being in balance, you know, we can learn something from our friends, the Italians.

They did it over a period of years, and they now have a small primary budget surplus. And financial dynamics in Italy are much better than, say,

in the UK or France, right? Now, you know what's interesting here is that there's just no appetite inside the Trump Administration or the Democratic

opposition in Washington to do any of that.

So, what we're getting is something called yield curve control. Now you brought me on a little over a year ago, and I mentioned that to you, and

you perked up. I could tell you're like, this is going to get interesting. Well, we've arrived at that moment where we've got a U.S. Treasury

Secretary using tools that are meant for small-time liquidity crisis, not systematic problems around the path of spending, not problems having to do

with how we're going to pay for our past deficits, our debt.

The interest on the debt is now well over what we spend on defense. It's a conversation that's been building long overdue, and it looks like we're

going to have this in the run-up to the U.S. election.

ANDERSON: What's the you know, worst-case scenario here? I mean, I'm just looking at the stock markets, which do not seem to care at this point. I

mean, we are still, you know, looking at historic highs across these three main markets, and we've got bond prices higher at this point, yield

slightly lower, but I mean, you know, not significantly.

So, what's the worst-case scenario at this point?

BRUSUELAS: All right. So, we're not in a crisis. I want to make clear that I communicate that to everybody out there. What we're in is where we're

seeing a pivot among rate-sensitive investors, i.e. pension funds, hedge funds, private sector actors, who are the really now driving the purchases

of U.S. issued debt.

They're demanding a higher risk premium, and that's causing yields to rise. Sort of the quieter but more important news is those rate insensitive

buyers, foreign central banks, and foreign governments have slowed the pace of their purchases, and in many cases, they're offloading debt.

That's one of the reasons why the U.S. Treasury Secretary intervened to support the BOJ in their attempts to make sure there's not an orderly --

disorderly unwind of the yen, another attempt to cap yields, and that's why they took this very unusual two steps over the past two weeks to intervene

in the bond market.

No crisis, but we've reached a pivot point.

ANDERSON: That's fascinating. Short term, very short term today. What should investors be watching for as we get set to hear Canada's sort of

retaliation on this tariff spat? And how much could Ottawa's response, do you believe, determine whether this does become a prolonged trade war?

Or is this going to bring both sides effectively back to the negotiating table?

BRUSUELAS: OK, two things. One is we do want to watch for the dollar-for- dollar retaliation out of Ottawa, but we've all been conditioned to the sequencing of these negotiations in both Trump Administrations. Typically,

you get maximalist demands right before both sides back off and converge on a mutual agreeable exit from the crisis.

All right, so that that's where I would first. Second, the issues that are going to be going on between the U.S. and Iran, the attempt to economically

-- Tehran, will include the identification of sanctions on a major financial institution. When we talk U.S., Iran, and economic -- really not

talking about Iran.

We're talking about is China. So, the parlor game right now in Wall Street that started yesterday afternoon is which global bank is it? Which global

financial intermediary institution is it? My sense is I'm thinking one of the large Chinese banks may come under that designation.

[09:40:00]

-- that might roil things globally. Not so much in the United States, but globally, so this is really I think where the rubber hits the road for the

remainder of the week. And Becky, what happened to that nice quiet end of summer we were all planning? It just didn't occur.

ANDERSON: Well, you're right. We wait and see what happens next. Thank you. Up next, we're going to do a bit of sport for you. Stay with us.

(COMMERCIAL BREAK)

ANDERSON: Well, cyclists, of course, are used to riding in many different weather conditions. So, you've got to wonder what they were thinking on

Monday in the French Pyrenees when a hailstorm came through, and they were forced to take shelter. Amanda Davies has that in "World Sport". I'm back

in 15 minutes with more "Connect the World".

(COMMERCIAL BREAK)

[09:45:00]

(WORLD SPORT)

END