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Putin Lashes Out At Russians With Western Mentality; Ukrainian Student Leaves Stanford To Fight For Ukraine; Federal Reserve Hikes Interest Rates For First Time Since 2018. Aired 5:30-6a ET

Aired March 17, 2022 - 05:30   ET

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

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[05:31:46]

CHRISTINE ROMANS, CNN ANCHOR: All right. In a televised address, Russian President Vladimir Putin lashed out at Russians with what he called a Western mindset.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Obviously, the West will try to rely on the so-called fifth column on national traitors -- on those who earn money here with us but live there. And I mean live there -- not even in a geographical sense of the word but according to their thoughts, their slavish consciousness.

(END VIDEO CLIP)

ROMANS: This, as thousands of Russians have fled the country or have been detained for protesting the war in Ukraine.

CNN's Jim Bittermann live in Paris with more. And Jim, who is Putin talking about? Are these oligarchs, these soldiers' mothers who are starting to become more vocal about the war, college students, or just anybody who dare question him?

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think just about anybody that dares question him. And that was a very, really, fairly bizarre speech there yesterday, Christine.

Among other things he said -- and bizarre is probably putting it too kindly -- he said the Russian people will always be able to distinguish true patriots from scum and simply spit them out like bugs that have accidentally flown into their mouths. It was pretty graphic and all of it unsettling the way he was talking.

But yes, he's going after people like -- for example, there's a blogger -- an influencer -- a social influencer who spends her -- most of her time here in France and has over 900,000 followers. A Russian who has been sharply critical of the invasion of Ukraine and as a consequence, she's now the target of an investigation that the Russian authorities have opened up. Of course, she's basically living here so they probably won't get to her. On the oligarch front, a lot of their assets -- a lot of their toys are being seized all over Europe. In fact, this week, the European Union announced that 600 individuals will be targets of raids. There are things like yachts that are being picked up in Spain -- three yachts. There was a vineyard here in France that basically can't operate because they've seized the assets of the company that runs it.

So, there's a lot of assets that are being picked up and a lot of people being targeted by Western authorities. And, of course, now you've got Putin targeting his own people -- Christine.

ROMANS: All right, Jim Bittermann. Bizarre, indeed. Bugs in your mouth to spit out. Thank you.

Let's bring in David Sanger, CNN political and national security analyst here. Putin ranting against Russians with a Western mindset. What does he gain by acknowledging that there are people who are against him?

DAVID SANGER, CNN POLITICAL AND NATIONAL SECURITY ANALYST, WHITE HOUSE AND NATIONAL SECURITY CORRESPONDENT, THE NEW YORK TIMES, AUTHOR, "THE PERFECT WEAPON" (via Webex by Cisco): You know, I think at this moment, he's recognizing that he's not doing well in this war, to put it mildly. And that the West has found ways to get at him, particularly through the sanctions, that I don't think he anticipated would be this successful, and he's lashing out.

You saw him lash out at his intelligence chiefs two weeks ago. We've got reports that he may be blaming the FSB for many of his problems -- for failing to anticipate what was going to go wrong.

[05:35:00]

And he's always had a very difficult relationship with the oligarchs. He's needed them to hide his money and to perform some tasks in the West for him. But he's never liked them -- never brought them into the inner circle. And now, I think is letting his true feelings out, which is that fundamentally, he's been betrayed by them.

ROMANS: Look, what we're seeing on the ground the last 24 hours has been horrific. You've got this lack of a true ceasefire, lack of true humanitarian corridors. You have the bombardment of civilians -- clearly, the bombardment of civilians in Ukraine.

Our Stephen Collinson has a piece up this morning showing, he says, the battle for survival is far from over. Do you agree?

SANGER: Absolutely. And, you know, I thought it was telling yesterday when somebody yelled out to the president at the end of an event is this a war crime or is Putin guilty of war crimes, actually putting it directly on the president. And the president didn't hear it first very well and came back into the room to say yes, it is and to blame Putin for war crimes. That's significantly a different place than the White House was in a week or two ago and tells you where they are right now.

It also raises, though, a new problem that you're hearing frequently from many in the administration, which is if Putin is cornered, what might he do? And that's why when Jake Sullivan called his -- the national security adviser called his Russian counterpart yesterday, the first thing he raised was the potential use of chemical and biological weapons. And I think there is a growing concern that Putin, in a corner, will reach for some dramatic act.

ROMANS: Right, and that's why so many of us are watching so carefully every word he says and how cornered sometimes he sounds lashing out against his own citizens for their Western mindsets.

The U.S. Treasury, meantime, is going to allow Russia to avoid its first international default in a century with funds from frozen assets. So, they're going to pay the dollars that they need on the $117 million in interest.

How's this going to play out for Russia? I mean, default avoided for now -- debt default avoided for now, but the Russian economy is a wreck.

SANGER: It is, and you can only use this card a few times, so I'm not sure how they're going to manage to avoid default in a few weeks from now or a few months from now. And I don't know whether the strategy here is to let it settle in on them what the cost of default would be and hope that changes Putin's view or not. But it doesn't seem to me right now under current circumstances that Russia could avoid default over the long term.

ROMANS: Yes. I mean, clearly, the Russian citizens -- their standard of living will decline. There could be some -- economists tell me a depression inside Russia.

In Ukraine -- I mean, it's planting season coming up here in a few weeks. So, I mean, you have -- the disruption there is even -- is just -- it's just devastating.

All right, David Sanger.

SANGER: Yes, it is.

ROMANS: Yes. Thank you so much. Nice to see you.

In a remarkable move --

SANGER: Thank you.

ROMANS: You're welcome.

In a remarkable move, a Ukrainian student -- excuse me -- at Stanford University has paused her studies to help her country. Catarina Buchatskiy took a leave of absence from Stanford and is now in Poland assisting with humanitarian efforts.

Katarina joins me now. Sorry I butchered your last name there. It's amazing to meet you and I love the piece that you wrote for us.

Tell us about your decision -- CATARINA BUCHATSKIY, STANFORD STUDENT ON LEAVE IN POLAND TO HELP UKRAINIANS (via Webex by Cisco): Thank you.

ROMANS: -- to go to Poland. I mean, you were a college student and suddenly, looking around, life on campus didn't compare at all with what your countrymen were going through.

BUCHATSKIY: Yes. I think something that I like to say is I was a student at Stanford up until February 24th. And after that -- up until that, I was a lot of things -- student, friend, classmate. But on February 24th -- I mean, the only thing that mattered was that I was Ukrainian and I think a lot of other Ukrainians felt the same way. And I just couldn't possibly be on campus and think about my aspects of my regular life when this was happening.

And I pretty immediately called my mother and asked her if I could go back. At first, I was trying to go back into Ukraine but I think that was obviously in the heat of the moment -- the spur of the emotion. But after thinking about it for a few days and realizing that my Ukrainian friends were congregating in Poland, I called my mom again and I just let her know I've made these plans. I'm heading out to Poland.

And I think my mom realized that my decision had been made and that there was really nothing that could me from doing this. And so, she wished me best of luck and they've been really supportive.

ROMANS: That's amazing. That's amazing. Well look, 1.9 million of your countrymen moving through Poland here so there is definitely a humanitarian need for you there.

[05:40:03]

And you write -- you argue that this war is Russia's latest attempt to strip Ukrainians like you of your identity. And we know that Vladimir Putin has said for many, many years that Ukraine is not really a country -- it's part of Russia.

BUCHATSKIY: Right.

ROMANS: Well, talk to me about that.

BUCHATSKIY: Right. So, really, I think that it's important to consider this war in the greater historical context of Ukraine-Russia relations because this is not the first time that Russia has tried to occupy -- has invaded Ukraine, and that has challenged the notion of Ukrainian statehood. And for centuries, Ukrainians have had their own conceptions of statehood and their national identity, and Russia has consistently suppressed that and argued against that.

And I think that with Putin's declaration of war when he argued that Ukraine is a failed state created by Lenin, it just goes to show this is a continuation of centuries-long Russian policy to restrict Ukrainian statehood and the very existence of Ukraine.

And I think that the reason why this is so important to consider is because the centuries-long policy has told us that even if we win the war -- and I do believe we will win -- there is no necessary guarantee that this will be the last time that we'll be in conflict with Russia. History has showed us that it's happened again and again.

And so, I think that in terms of considering the historical context it's important because moving forward what's going to be most important to ensure that we never get into this kind of conflict with Russia ever again is to make sure that there's no more confusion, no more gray area about Ukraine and Russia's historical ties and this conception of whether Ukraine is a real country or not.

There can be no confusion ever again -- that Russia does not try to pull this on us again, which is why I think that historical education and considering the context -- the broader historical context is so important to prevent a future conflict as well.

ROMANS: I think one of the things that's so fascinating is how the West has come together, right, with a unified voice to support your president, Zelenskyy. I mean, yesterday, he gave a very emotional appeal to the U.S. Congress, to the Bundestag in Germany just a couple of hours ago. He'll speak to the Knesset.

Do you think that maybe what comes out of this is a recognition -- an international recognition to preserve the history, culture, and sovereignty of your country?

BUCHATSKIY: Absolutely, absolutely -- I really do believe so.

And I think one of the most important things is that when I was growing up in Ukraine and when I first moved to the states from Ukraine, people did not even know what Ukraine was. People did not even know how to say Ukraine. They weren't sure what our history.

And so, even just with this, now more than ever, people know what Ukraine is, where it is. That it is an independent country and that we have our own nation.

And so, I think that even just this international recognition and so much attention being on Ukraine is going to be great in the long term. Because I think that never again will I run into an American that asks me what's Ukraine, or where is that? Are you from Russia?

And so, I think that cementing that statehood not only in Ukraine but also for Western audiences that now know what Ukraine is, is very, very important and touching to me as well. Because so many of my friends have reached out that did not necessarily know a lot about my history and my country and are now saying wow, I had no idea that you had such a rich culture -- that you guys were such fighters, such warriors. And a lot of people are enamored by Ukrainians and Ukrainian culture, which I think is amazing.

ROMANS: All right, Catarina Buchatskiy. Did I say it right?

BUCHATSKIY: Buchatskiy.

ROMANS: Buchatskiy. OK, I'm sorry. Thank you. Thank you so much for your beautiful piece and for all that you're doing.

BUCHATSKIY: Thanks for having me.

ROMANS: You're welcome.

All right, the Fed approving the first interest rate hike in more than three years to address spiraling inflation. What it means for you and your pocketbook.

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[05:47:45]

ROMANS: All right, breaking news. We are now getting word that there are survivors emerging from that theater that was bombed by Russian forces in Mariupol, Ukraine. The former head of the Donetsk region posting a short statement on Facebook, saying "After an awful night of not knowing, we finally have good news." He says the bomb shelter in the theater held up and that people are coming out alive.

Officials say hundreds of people -- hundreds of people, including children, had taken shelter in that theater. That theater clearly marked with the word, in Russian, "children outside" and it was still bombed.

All right, let's get a check on CNN Business this morning. Looking at markets around the world this Thursday edition, big gains in Asia. A mixed opening in Europe. And on Wall Street, stock index futures are, right now -- if we can pull those up -- stock index futures are down just a little bit.

It was a rally for stocks on Wednesday after the Federal Reserve raised interest rates for the first time since December 2018 -- a quarter percentage point hike. That's as expected.

The Fed chief there, Jerome Powell, says the central bank will remain aggressive in fighting inflation, stressing the economy is, quote, "very strong."

The Dow rose 1.6 percent. That's nearly 520 points. The S&P, 2.2 percent. Look at the Nasdaq composite. A big pop there. Of course, it had been down 20 percent the past few months.

The era of cheap money is over. As the Federal Reserve starts raising interest rates to fight inflation, you might be wondering what higher rates mean for you. In short, it means higher borrowing costs. Expect higher rates on car loans, credit cards, student debt, and mortgages.

The 30-year fixed-rate mortgage already above -- well, almost four percent. That's still really cheap by historical standards. I mean, in the '70s, it was like 19-20 percent. But a sharp jump from recent lows.

Higher rates will hit the stock market, too. Zero percent interest rates have forced investors into riskier assets like stocks. Now, the stock market faces more competition from more foreign investments like government bonds. And more expensive business loans can cause companies to pause on investments and hiring, so watch the reaction there.

So, will rate hikes be good for savers? Oh, not so fast. Money stashed in savings and CDs has earned almost nothing for the past couple of years. Savers will, in theory, start to earn interest again but in practice, it could take some time to play out. Those rates will still be very low -- well below inflation.

[05:50:01]

For more, let's bring in Nela Richardson, a chief economist for ADP. So nice to see you this morning.

Free money -- it's over. That era is over. What should we expect? More rate hikes ahead? What will it mean for people?

NELA RICHARDSON, CHIEF ECONOMIST, ADP (via Skype): Well, I think what it will mean for people is that policy generally reacts with a lag. So eventually, what we hope to see is lower inflation. Cheap money is good but when you're dollar doesn't go as far as it used that's not great.

And what people have seen -- what Main Street has seen is that when they go to the grocery store, when they go to the gas station, when they pay their rent, prices have gone up. And so, hope is that these rate hikes curb that inflation so they really get the pocketbook effect in their spending.

ROMANS: The Fed chief yesterday pretty upbeat, really, about the state of the jobs market -- listen.

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JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: This is a situation where wages have moved up at the highest rate in a very long time and people are able to quit their jobs and move to better-paying jobs in the same industry or different industry. So, it's a really attractive labor market for people. And once -- you know, as we get past COVID, well and truly, it becomes an even more attractive one.

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ROMANS: You are a labor economist. How do you assess his assessment of the labor market, and how long does this last?

RICHARDSON: Well, we hope it lasts through the duration. We have seen a remarkable recovery from March of 2020. If you think back Christine to the Great Recession, the unemployment rate was above eight percent for three years. Within two years, we're down to 3.8 percent. We're in reach of that 3.5 percent before the pandemic, and that was a 50-year low.

On the other side of that, we've seen wages grow and they've been robust -- much stronger than the 10 years leading up to the pandemic. The one catch is inflation because, in real terms, most people's wages aren't keeping up with inflation.

ROMANS: Right.

RICHARDSON: And that is the sticker for the labor market right now, and I think that's what the Federal Reserve realizes.

ROMANS: Yes, and you also have gas prices. Gas prices really moving up quickly this spring. But then now, you've got oil prices that have tumbled here.

The president kind of weighing in on this and saying hey, how come gas prices don't fall as quickly as oil prices? There is a lag here, too, as well, but I think it shows just how the administration is very aware that the public is very focused on energy prices.

RICHARDSON: Correct. And this trend -- this stickiness when it comes to gas and oil -- they move together but not in lockstep. And unfortunately, they don't move on the way down as quickly as they do on the way up, and that is noticed by people.

But overall, the issue of higher energy prices, higher rent prices, and higher food prices are front and center for most -- for many people, especially as we're in this transition period in the economy where there's a lot less federal relief spending in the economy to stimulate that growth going forward.

ROMANS: All right, Nela Richardson. Always nice to see you. Thank you for dropping by this morning -- thanks.

RICHARDSON: Thanks for having me.

ROMANS: All right. Before Volodymyr Zelenskyy was president of Ukraine he played one on T.V. Where you can watch his comedy series, next.

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[05:57:58]

ROMANS: Ukrainian officials say the mayor of Melitopol has been freed from Russian captivity in a prisoner swap. Mayor Ivan Fedorov was captured last week -- remember this video -- by armed men in the city that's now been occupied by Russian forces. He was reportedly taken to Luhansk after his arrest and he was told to cooperate with Russia, which he refused to do. Officials say Federov was exchanged for nine captured Russian soldiers.

Netflix is bringing back Ukrainian President Zelenskyy's satirical series "SERVANT OF THE PEOPLE."

(BEGIN VIDEO CLIP)

Clip from Netflix's "SERVANT OF THE PEOPLE."

(END VIDEO CLIP) ROMANS: The show was originally on the platform from 2017 to 2021. In it, Zelenskyy plays a teacher who goes on a rant against corruption and unexpectedly becomes president after the video goes viral. The series ended after three seasons when Zelenskyy chose to run for president in real life. That was 2019, heading a new political party also called "Servant of the People" back on Netflix.

Thanks for joining us. I'm Christine Romans. "NEW DAY" picks it up right now.

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