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Early Start with John Berman and Zoraida Sambolin

Two American Fighters Missing In Ukraine, Feared Captured; Xi Reaffirms Support For Russia In Call With Putin; Federal Reserve Raises Interest Rates By Highest Amount Since 1994. Aired 5:30-6a ET

Aired June 16, 2022 - 05:30   ET




CHRISTINE ROMANS, CNN ANCHOR: Two Americans who have been fighting alongside Ukrainian forces are now missing. Alexander Drueke and Andy Huynh disappeared during battle north of Kharkiv.

In an emotional interview, their loved ones spoke to CNN last night.


BUNNY DRUEKE, MOTHER OF ALEXANDER JOHN-ROBERT DRUEKE: I'm trying to remain strong and calm because getting upset won't help Alex at all. But hearing Joy for the first time is difficult because I feel for her.

He's one of the most loyal Americans you would ever hope to meet and he was proud to serve his country. And he said mom, I really need to go and help fight in Ukraine.

JOY BLACK, FIANCE OF ANDY TAI NGOC HUYNH: He's just so strong and he has such a big heart. He didn't go there for selfish reasons or anything. He just -- he really had this gnawing at his heart and this big burden on him to go and serve the people however he can.


ROMANS: A Russian propaganda channel has posted online that two Americans have been captured, although that report has not been confirmed.

CNN's Salma Abdelaziz live in Kyiv with more for us. Salma, what do we know about this search for these two Americans?

SALMA ABDELAZIZ, CNN REPORTER: So, these two Americans, Alexander Drueke and Andy Huynh, both from Alabama -- they were fighting under the command of Ukrainian forces in the Kharkiv region. That's a major frontline right now. And about a week ago, during this military operation, they disappeared. This was June 9 that they were last seen. There were subsequent search operations and no remains were found.

Their loved ones now believe that they have been captured by Russian forces. Again, there's no confirmation as to that taking place. U.S. officials have confirmed the two men are missing but again, they have not verified that they are, indeed, in Russian custody -- have been captured by Russian forces.

The Pentagon spokesperson, John Kirby, was, of course, quick to reassure the families that U.S. officials will do everything they can to bring them home safely. But he also warned about the dangers of Americans coming to Ukraine. Take a listen.


JOHN KIRBY, NATIONAL SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: We will do everything we can to get them safely back home. I do think, however, that this is an important point in time to remind that we discourage Americans from going to Ukraine and fighting in Ukraine. It is a warzone. It's combat. And if you feel passionate about supporting Ukraine there is any number of other ways to do that.


ABDELAZIZ: Now, again, because they were fighting with the Ukrainian military they should be treated as prisoners of war if they've been captured by Russian forces. That means the Geneva Conventions apply. There's very strict rules about how they should be treated. But human rights groups say that foreign fighters, in particular, have not been treated under those Geneva Conventions appropriately.

We had a very recent case of two British foreign fighters who were here fighting in Ukraine. They were recently sentenced to death by a Russian-backed court -- a court that was not recognized by the international community.

And, of course, the fear is that if these two men have been captured by Russian forces that they could be used as a bargaining chip for their families right now. The serious concern is that these two men might pop up on Russian television channels and be used as bargaining chips. Another reminder of just how dangerous it is for Americans to come and fight here in Ukraine.

ROMANS: All right, Salma, keep us posted. Thank you so much.


LAURA JARRETT, CNN ANCHOR: Right now, Defense Sec. Lloyd Austin is meeting with NATO defense ministers in Belgium one day after the Biden administration announced it is sending an additional $1 billion in military aid to Ukraine to fight Russia.

CNN's Oren Liebermann is traveling with the secretary and he joins us live from Brussels. So, Oren, what is the secretary hoping to achieve today?

OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: Laura, first, some details about that $1 billion aid package. The U.S. now sending 18 more Howitzers -- that's on top of the artillery that has already been sent in -- as well as more than 36,000 rounds of ammunition. Crucially, the U.S. is also sending in ammunition for the HIMARS system. That's a multiple-launch rocket system -- one of the most advanced and powerful weapons the U.S. has sent in to this point. The training on that for the first tranche of Ukrainian soldiers just wrapped up, so the expectation is that will join the fight soon, and that's what we're looking for.

Of course, we know how difficult it is for Ukrainian forces. The Russian incremental gains are still gains nevertheless in Eastern Ukraine and in the city of Syeverodonetsk.

In terms of what the Defense secretary is looking for today, today is about NATO moving forward. What changes do NATO countries need in terms of the force posture now that the U.S. and its allies have seen what Russia is willing to do with its aggression? Does it require more forces moving east in Europe? Does it require a larger number? What types of forces?

All that is part of the discussion today. Those discussions will then turn into recommendations and actions, setting up for that NATO summit later on this month.

Of course, one of the big questions is how fast can the weapons the U.S. announced get in? Some of those should arrive quickly. They are being pulled directly from DOD stocks and that process has gone down now to a couple of days from being put into a list to review, to approval, to sending. Others will come from new contracts between the U.S. and arms manufacturers. That will take a bit more time.

But because of the incremental nature of the gains made by Russia, the U.S. believes there is time for those weapons to make a difference.

JARRETT: All right, Oren Liebermann. Thank you so much.

ROMANS: All right. China's President Xi and Russia's Vladimir Putin speaking by phone for only the second time since Russia's invasion of Ukraine.

Let's bring in CNN's Steven Jiang live in Hong Kong. Steven, global backlash is building against Russia's invasion but these two presidents are boasting the closest cooperation in years.

STEVEN JIANG, CNN BEIJING BUREAU CHIEF: That's right, Christine. And remember, like Russia, China still refuses to call this a Russian invasion, and Xi Jinping still has not called President Zelenskyy of Ukraine since the war broke out.

Now, the Chinese readout after this phone call really contains nothing surprising, highlighting Beijing's supposed (PH) neutrality. The Kremlin's statement, however, is less subtle, saying Xi actually quote-unquote "noted the legitimacy of Russia's actions to defend its national interests in the face of Western threats."

So these two strongman leaders clearly increasingly bonded and pushed closer by this belief that the U.S. and its allies are ganging up on both countries strategically and economically. That's why Xi told Putin that they need to work together to support each on their respective core interests.

Now, Xi Jinping mentioned Xinjiang, Hong Kong, and Taiwan -- all these issues where China is under growing U.S. pressure. And Russia, for its part, obviously, increasingly needs China to lessen the impact of severe Western sanctions.

And it's also worth nothing Christine that this phone call took place on Xi Jinping's birthday. He turned 69 on Wednesday. This was actually the fourth time the two men talked on Xi Jinping's birthday. So their bromance, if you will, does go back a long way and very much going strong, just like the so-called no-limits partnership between their countries -- Christine.

ROMANS: Yes, a partnership that has -- a friendship that has no limits.

All right, thank you so much. Nice to see you, Steven.

JARRETT: Coming up, Kevin Spacey back in a courtroom facing sexual assault charges, this time in London.

ROMANS: And big corporations are being blamed for inflation. So do they deserve it, and how much?



ROMANS: All right, let's get a check on CNN Business this morning.

Looking at markets around the world, Asian shares have closed for the day, and Europe has opened lower. That's a -- that's a sharp drop in Europe. On Wall Street, stock index futures at this hour also pointing to some significant losses. I mean, you could see the Dow lose the 30,000 mark if this kind of mood persists this morning.

On Wednesday, it was a rebound after the Fed raised interest rates by three-quarters of a percentage point. Financial and tech stocks leading the way there. The Fed chief Jerome Powell indicating a similar hike could come in July if the economic data doesn't improve, especially vis-a-vis inflation.

New evidence there of the rising cost of gas and food that's causing Americans to pull back on spending on other items. Retail sales fell three-tenths of a percent from April to May. That's the first decline in spending since December.

The big concern is where consumers are spending money and where they're not. Spending at gas stations up 4%. It was up 1.2% month- over-month at grocery stores. Spending at other retailers was down 1% from April to May.

All right, let's bring in Mark Zandi, chief economist at Moody's Analytics. Mark, I want to get your read on that Fed move yesterday, something they haven't done in -- since 1994. A big -- it's almost like three rate hikes in one day when you think about how they usually are so careful with their moves on the official interest rates.

Is this going to be enough to start to turn the tide on inflation?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS (via Webex by Cisco): Yes, that was a pretty big step, Christine. I mean, since 1994, you haven't seen anything like that. So they're very serious about getting inflation down.

In fact, there was a lot of other things that they talked about in the statement and in the -- Jay Powell, the chair, talked about in the press conference afterwards. And if you listen and read, they're pretty clear they're willing to sacrifice the economic expansion to lower inflation. So one way or the other, inflation is going to come back down here and that 75-point basis move was a big step in that direction.

ROMANS: Yes. When you say sacrifice the expansion, explain to our viewers what that means. I mean, they are looking out into next year at a higher -- a little bit higher unemployment rate, although it's still historically low. But we're talking about maybe slowing the economy down and raising the unemployment rate a little bit as part of that goal.


ZANDI: Well, that's the script, right? They'd like that to happen. But I think what they're saying is look, if push comes to shove and I have to push the economy into a recession to get inflation down, I'm going to do that. Because I know that if I don't I'm going to ultimately suffer a recession that's going to be a lot worse.

So, you know, I think it raises the odds that we have a recession here going forward. I still don't think that's the most likely scenario but that's definitely a very serious scenario, particularly given that the Fed is saying to us they're going to do what it takes --


ZANDI: -- to get inflation down.

ROMANS: He essentially -- I mean, he said failure is not an option. Inflation is hurting American families and it's distorting -- it's distorting the economy -- how we do business. The normal operation of the economy is distorted by persistent high inflation like that.

You know, I want to ask you about this notion of greedflation. We've heard a lot about corporate profits. The president has ripped oil companies for profit margins being so fat, especially for refiners.

But if you look at the profit margins of the oil companies -- or the profits of the oil companies in the first quarter -- wow. I mean, they're making so much money while Americans are paying more for gas and everything else.

Is it fair to blame the capitalist model here? I mean, is this the rough edge of capitalism that when consumers are really getting hurt this is actually a great time to be returning money to shareholders?

ZANDI: Yes. I don't put too much weight on -- I don't put any weight on the price gouging argument for the high inflation. There's a long list of reasons for the high inflation. At the top of the list is the Russian invasion of Ukraine and the spike in oil prices. A very close second is the pandemic and the impact on supply chains and on labor markets.

Price gouging -- I just don't see it. I mean, if you look at profit margins economy-wide across all companies, that's falling and it's been falling now for more than a year. And the margin obviously is the price the business charges compared to the cost of producing whatever it is they produce. If they were gouging, that would be rising, not falling.

Yes, maybe there are some sectors of the economy. You pointed to energy. The meatpacking industry has been called out where margins are high.

But even there, for the energy industry, we want them to produce more oil. We need more oil.

So I'm not so sure these high margins -- these high profits -- they have a purpose. They're a great incentive for these companies to go out and put more rigs in the ground and produce more oil and get those prices back down.

So -- now having said all that, Christine, I should say I don't think it's wrong -- in fact, I think it's appropriate for lawmakers, the president, and Congress to keep shining -- put a bright, shiny light on business practices here to make sure that everyone is playing by the rules. Because in times past during crises, businesses have taken advantage. But I just don't see that as a big explanation of what -- for the high inflation that we're suffering right now.

ROMANS: Are you seeing signs yet that consumers are pulling back? I mean, we know -- we saw that retail sales number yesterday. We know people have shifted. They were buying couches and pajamas, and stay- at-home things for a year and a half, and now they're buying services. They're buying experiences again. So that's sort of a natural shift.

But are people -- are people pulling back because of inflation?

ZANDI: No, I don't think so. I think we are seeing some moderation in spending growth but that's by design, right? I mean, the Fed is raising interest rates to slow the growth rate of the economy, which means that consumers -- we want them to keep spending so we can avoid a recession, but to spend at a slower -- less avid clip. And so, that's what we're seeing here.

And on top of that, as you point out, a shift in spending patterns. We -- during the pandemic, we were stuck on our -- in our homes and we were buying stuff. And we've had -- we have a lot of stuff. And now we want to go out and travel. Just take a look at all the reports about airline travel and how those planes are full. So we're shifting the way we spend. So it depends on what part of the consumer elephant you touch. But if you take a look at the entire elephant it looks like the consumer is doing their part.

ROMANS: All right, Mark Zandi. Always nice to see you. Thanks for getting up early for us. Thanks, Mark.

ZANDI: Yes, anytime.


JARRETT: Always --

ROMANS: Oh, don't say that. We will hold you to that. Anytime means anytime when you're 5:00 a.m. on EARLY START.

JARRETT: Oh, yes. We have our EARLY START regulars.

ROMANS: All right. Coming up, new CNN reporting on Donald Trump's plans for 2024.

JARRETT: And next, Tom Brady the quarterback talks about what Tom Brady the broadcaster will do.



ROMANS: All right, welcome back.

This morning, actor Kevin Spacey appearing in court in the U.K. on sexual assault charges. He faces four counts of sexual assaulting of three men in incidents dating back as far as 2005.

Let's bring in CNN's Nina dos Santos live in London. Nina, what do we know about his court date?

NINA DOS SANTOS, CNN EUROPE EDITOR: Well, we've just heard, actually now, that the court has finished its session. He appeared to confirm only his date of birth, his address in London, and his full name. This is an initial hearing -- a brief one -- to now set the date to what happens from here, Christine.

And the judge granted him unconditional bail, which means that he would, in theory, be allowed to travel back to the United States before the next court hearing, which is set to take place on the 14th of July.


He faces four counts of sexual assault here in the U.K. pertaining to the more or less decade when he lived here as artistic director of the theater -- the Old Vic Theatre. He's alleged to have committed sexual assault on three men in their 40s and in their 30s. Three of these charges are said to take place here in London and another one in the west of the country in Gloucestershire, which is a part where many celebrities have their country homes.

It has to be said that Kevin Spacey arrived here earlier this week on these shores voluntarily, pre-issuing a statement to "GOOD MORNING AMERICA" saying that he was confident he could prove his innocence.

This is the first time that we've seen Kevin Spacey in a number of years since his private life and his career has come under increasing scrutiny. Remember, he's already also facing a federal case in New York as well, which continues, too -- Christine.

ROMANS: All right, Nina. Thank you so much for that. Keep us posted.

All right, the Avalanche held off a furious Lightning comeback to win game one of the Stanley Cup Finals in an overtime thriller.

Coy Wire has this morning's Bleacher Report. Hi, Coy.

COY WIRE, CNN SPORTS CORRESPONDENT: Top of the morning to you, Christine.

This series has all the fixings of becoming one of the best of all time. The Lightning, the two-time defending champs, trying to become the first NHL team in four decades to win three in a row. The Avalanche, though, best record in the west, earning home-ice advantage in the Stanley Cup Final.

Here we go. Colorado jumping out to a 3-1 lead in the very first period of their first final since 2001. Put your hands up. But Lightning strikes twice in the second, scoring two goals in less than a minute to tie it up and send it to overtime.

But that is where the Avalanche buried Tampa. Just a minute-23 in, Andre Burakovsky hammering it home. The crowd goes wild. A 4-3 win.

And after the game, Burakovsky talks about the biggest goal of the playoff, so far, for Colorado.


ANDRE BURAKOVSKY, COLORADO AVALANCHE WINGER: I wasn't thinking too much. It was a kind of crazy feeling and I mean, just to be able to be here in this -- in this final and help the team when a game. I mean, it's -- it was a nice feeling for sure.


WIRE: And another day, another almost no-hitter in baseball. This time, Dodgers pitcher Tyler Anderson keeping the Angels hitless all the way through one out in the ninth inning.

But the hopes and dreams of Dodger Stadium faithful come crumbling down at the hands and bat of Japan's 2-way superstar, Shohei Ohtani. Why'd you do it, man? It's his first triple of the season.

Anderson ends up with a 4-1 win and a standing ovation for a heck of a job. All right, until yesterday, there had only been 103 immaculate innings in Major League Baseball's 146-year history. We're talking throwing nine pitches, striking out all three batters.

Well, the Astros did it twice, Christine, in the same game. Starter Luis Garcia striking out three Rangers batters on nine pitches in the second inning. But get this -- reliever Phil Maton comes in and accomplishes the same feat in the seventh inning against the same three hitters. What are the chances?

This is also the first time immaculate innings have been thrown on the same day, regardless of the team or game.

Now, I caught up with the GOAT yesterday -- the greatest of all time, Tom Brady, who has had a busy off-season, from retiring to unretiring, to launching his Brady brand clothing line -- even some acting for Hertz.

Well, we talked about that and the big news that he's going to be getting into broadcasting, calling games when he does retire from play. The 7-time Super Bowl champ says that's going to be a big challenge.


TOM BRADY, TAMPA BAY BUCCANEERS QUARTERBACK: It's not something you just show up to. It's something that you're going to have to work really hard at. When the time comes, I'm going to commit as much time as I need to make sure that when I step out there and my first broadcast on-air, it's going to be as best as I possibly can do knowing that it's going to be a long ways from where I probably want it to be and hopefully, where it will be many years from now. So right now, I'm still in my playing days, so I've got time to focus on that when I'm done.


WIRE: He's seemingly invincible at times, Christine. I did ask him what's your kryptonite like? What are you not good at? He says, strawberries. Strawberries are my kryptonite. He says he can't stand the taste or smell of them. So, there you go.

ROMANS: And he doesn't eat like any nightshade vegetables, too, right? I mean, he's like a super anti-inflammatory diet.

WIRE: You know your stuff. That's exactly right.

ROMANS: Yes. Well, you know, 40 is the new 30, 50 is the new 40 -- I don't know. But Tom Brady is defying the -- defying science.

WIRE: Defying science, indeed.

ROMANS: All right, thank you so much.

WIRE: All right.

ROMANS: Thanks for joining us. I'm Christine Romans. "NEW DAY" starts right now.