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Russia Pulling Out Of International Space Station At End Of 2024; Ukraine Fights For Southern Front As War Enters Sixth Month; Fed To Unveil Another Rate Hike Amid Signs Of Economic Slowdown. Aired 5:30-6a ET
Aired July 27, 2022 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: All right. Russia is pulling out of the International Space Station at the end of 2024 marking an end to a decades-long partnership with NASA and catching officials at the U.S. space agency off guard.
Clare Sebastian is in London for us tracking this story for us. Clare, what is Russia saying about why it's pulling out of this arrangement?
CLARE SEBASTIAN, CNN CORRESPONDENT: Not a whole lot, Christine, interestingly. This announcement was made by the new head of Roscosmos, which is Russia's space agency. He has been on the job for less than two weeks.
He made the announcement in a televised meeting with President Putin and the only explicit reason that he alluded to was the fact that he said that by 2024, when Russia is saying it will pull out of the ISS, it will have started work, he says he thinks, on their own orbital space station. So, sort of going out on their own.
NASA, as you say, caught off guard by this but perhaps not surprised because while the U.S. had committed to extending the life of the ISS from 2024 when it was set to be retired to 2030, Russia had not signed on yet. And the previous head of Roscosmos had been making threats in recent months given the obvious deterioration of relations between Russia and the U.S. He had been making threats to pull out of the ISS.
Now, some have their doubts about how this will work. The different countries involved in the ISS perform different roles and it's difficult to keep it going if you separate them out. But if it does happen this will, as you say, end decades of cooperation -- one of the very few areas where Russia and the U.S. are still cooperating.
And given the fact that, for example, China is also building its own space station, it could signal a new era of competition -- perhaps, even rivalry in space, Christine.
ROMANS: All right, interesting. Clare, thank you so much for that. Six months of war taking a deadly toll as Ukrainian troops make incremental gains along the southern front using long-range rockets -- some provided by the U.S. At the same time, Russia has been striking southern ports, even on the heels of this grain export deal between Moscow and Kyiv.
CNN's Ivan Watson is in Odesa talking to Ukrainians as they prepare for more fighting. So glad to have you here this morning, Ivan. What's the situation on the ground there? What are people telling you?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, good morning, Christine.
The Ukrainians and the Russian occupation administration have confirmed Ukrainian strikes overnight at a key bridge that is essential for the south of Ukraine -- for Russian forces -- that they rely on over the river Dnipro to reinforce and resupply their troops. And this is clearly part of a broader strategy that the Ukrainians have to try to cut off crucial supply lines for Russian-occupied southern Ukraine.
WATSON (voice-over): Scenes from Ukraine's southern front during the first months of the war. Footage shared exclusively with CNN shows Ukrainian Sr. Lt. Andrii Pidlisnyi hiding in shell craters, flying a drone to call in artillery strikes on Russian positions. But the team of spotters also narrowly escapes long-range fire from the Russian military.
Months after filming the videos, Pidlisnyi is still fighting on the southern front.
WATSON (on camera): Were the Russians in this village before?
ANDRII PIDLISNYI, SENIOR LIEUTENANT, ARMED FORCES OF UKRAINE: Yes.
WATSON (voice-over): The Ukrainian military is fighting to claw back territory seized by what this commander describes as well-prepared Russians.
PIDLISNYI: It's very slow -- the process to take back all our territories. But step by step, and with the help of Western guns, vehicles, and so on -- the artillery systems -- we do that.
WATSON (voice-over): This month, my team and I traveled the length of the southern front, from the critical port of Odesa to the edge of the Donbas region. I spoke to people willing to risk their lives against the Russian war machine.
In the city of Priluki (PH) Ukrainian forces storm a building. It's actually a training exercise to prepare these men for one of the most dangerous forms of modern warfare, urban combat.
The commander here was gravely wounded pushing Russian-backed separatists out of cities in the eastern Donbas region in 2014. OLEKSANDR PIKSUN, COLONEL, UKRAINIAN NATIONAL GUARD: (Speaking
WATSON (voice-over): "We have a duty to liberate our territories," he says. "This is our land and we will not give it to anyone."
That confidence shared by a regiment of frontline troops in Eastern Ukraine. They show off recently arrived British-made Land Rovers and this armored personnel carrier.
WATSON (on camera): I just noticed something. Take a look over here at this tire -- 'Made in Russia'. This was Russian.
VILNYI, AZOV KYIV REGIMENT: This was a Russian car. But our soldiers fight him and take this car to --
WATSON (on camera): You captured?
WATSON (voice-over): But the war is taking a dreadful toll here. Day and night, Russian rockets -- S-300 surface-to-air missiles repurposed to strike ground targets -- pound the frontline city of Mykolaiv, and more appear to be on the way.
Ukrainian resistance groups shared this exclusive footage with CNN taken just days ago showing the arrival of a train full of missiles in the occupied southern Kherson region, later confirmed by these satellite images provided to CNN by Maxar.
But with the help of U.S. long-range rockets, known as HIMARS, Ukraine has been targeting Russian ammunition depots. Senior Lt. Pidlisnyi says he noticed a difference on the front lines.
PIDLISNYI: We had about two or three weeks when they haven't enough ammunition to fight us.
WATSON (voice-over): Still, he predicts it will take a long time for Ukraine to win the war in the south.
PIDLISNYI: I'm not sure that we will win until the end of this year, and maybe to the end of next year.
WATSON (voice-over): Before I go, Pidlisnyi shows me captured Russian passports and driver's licenses.
WATSON (on camera): When did you capture these?
PIDLISNYI: About some weeks ago.
WATSON (voice-over): Russian men ranging from 22 to 41 years old who Pidlisnyi speculates are now dead.
WATSON (on camera): They look like you.
PIDLISNYI: Yes, they look like me. WATSON (on camera): They have similar names.
PIDLISNYI: Yes, but they are our enemies because I'm standing in my territory and they came to me to capture our territory. To kill me. To kill maybe my parents.
WATSON (voice-over): This is what Ukrainians are fighting for.
WATSON: There are two important sides to this war here in the south, Christine. There's the deadly missile war with Ukraine and Russia firing these long-range rockets and missiles, trying to hit groups of fighters on either side. And when they do strike successfully, neither side is admitting that they're suffering big losses in these strikes.
And then there's the fight on the ground face-to-face and that can be a case of two steps forward, one step back. For instance, one frontline unit that I've been in touch with -- Ukrainian side -- has succeeded in capturing a couple of formerly Russian-held villages, and then suffered a deadly ambush where they suffered some casualties as well. And that just gives you a sense of how treacherous this is and how Ukrainians are bleeding and dying for every step forward that they take.
ROMANS: Yes. So glad you're there to report it all out for us. Thank you so much, Ivan. Great stuff.
All right, a 7.0-magnitude earthquake rocking the Philippines, sending people running for safety Wednesday. The quake struck in northern Luzon, the country's most heavily populated island. Residents are being warned to stay alert because of the threat now of aftershocks, of course.
More than 250 miles away, residents in Manila felt the impact and were forced to evacuate buildings.
All right, just ahead, the latest on gas prices in America. And the Sandy Hook families seeking millions in court from conspiracy theorist Alex Jones.
ROMANS: All right, let's get a check on CNN Business this morning.
Looking at markets around the world, Asian stock markets have closed for the day, and they've closed mixed. Europe has opened slightly higher. And on Wall Street, gains as well for stock index futures this morning. We'll see if those can hold.
The Dow fell 220 points yesterday. The Nasdaq fell almost 2%. The S&P down a little over 1%.
Look, worries about the mighty American consumer after Walmart cut its earnings forecast. Inflation has shoppers focusing on buying the basics. Walmart's stock fell almost 8%, pulling other retailers down with it. Walmart will now cut prices on non-essential goods to move out inventory.
Also falling, gas prices, down another three cents overnight. Now, $4.30 is the national average, sliding a whopping 60 cents in just a month but still more than a dollar higher than a year ago.
The main event today, the Federal Reserve will announce how much it is raising interest rates in its fight against inflation. A 3/4-point hike is expected.
It's a big week. Second-quarter GDP data tomorrow, and about 1/3 of the S&P 500 companies report earnings this week, including big names like Apple, Alphabet, and Microsoft.
All right, McDonald's raising menu prices. And guess what? Customers are still biting. McDonald's has been spoon-feeding its customers small but frequent price increases to keep up with inflation. Small increases, right, so they don't scare off diners. It's working, with sales up almost 4% in the second quarter.
Home prices holding strong, up almost 20% in May -- but we're seeing some signs of cooling here. May's big jump in home prices slightly smaller than April's, a sign the market may be topping out here.
Mortgage rates have almost doubled in a matter of months. That makes the same house payment last year cost hundreds more a month this year if you were getting a new loan. In May, the average interest rate for a 30-year fixed-rate mortgage was above 5%, up from just 3.2% in January.
So much to get through here. Let's bring in Ken Rogoff, professor of economics at Harvard University, on this big Fed day. Nice to see you again, Ken.
You know, 75 basis points is a big one-time move for the Fed, and this will be the second one in a row. What does it tell you about what the Fed is trying to accomplish here, and what do you expect in the weeks and months ahead?
KEN ROGOFF, ECONOMICS PROFESSOR, HARVARD UNIVERSITY (via Skype): It's really unusual when they raise interest rates by this much this fast. Usually, on the way up they spoon-feed the interest rate hikes maybe 1/4 of a percent a time. This time, two times in a row, they are probably going to have done 3/4 of a percent. That's 1.5% altogether. It's a big hike.
And it tells you that they think they got behind the curve and they're trying to catch up. They're trying to bring down inflation, which has gone over 9%.
ROMANS: Do they keep raising interest rates in the meetings ahead? And at what point, though, do you think they might get spooked by what those higher interest rates will mean for the -- for the economy and consumers? ROGOFF: Well, exactly, Christine. I think they're going -- they think they're going to keep raising rates another percent or so after this, and they think that will be enough to have a -- maybe a mild recession but get inflation on track to where they want it to be.
My guess is that's not going to be enough. But I think when they land, they're going to decide the recession is bad enough. I don't think they're going to be willing after the pandemic and when the financial crisis still has people suffering from that -- I don't think they're going to be prepared to throw the economy into a steep recession. I think they're going to really try to avoid that, even if they say their priority is inflation.
ROMANS: Well then, that would keep inflation above their target for longer then, wouldn't it?
ROGOFF: Indeed. I think when push comes to shove they're willing to allow a mild recession to get it down to target within, say, the end of 2023. But I don't think they're willing to have a steep recession. My guess is they're going to need the latter. But they are optimistic and some forecasters are, but there's quite a mix, as you know.
ROMANS: We know that we're going to get second-quarter -- the first look at second-quarter GDP. We know that GDP was negative in the first quarter.
I mean, you're going to -- there are going to be armchair economists who are going to say oh -- and Republicans, frankly, who are going to say oh, this means we're in a recession.
Explain to people why just two consecutive quarters of a negative GDP read does not necessarily guarantee you're in a recession.
ROGOFF: Well, you're right, Christine, it's a big political number and the casual definition of a recession is two negative GDP quarters of growth in a row. But economists -- when they decide if there is a recession, they look at a lot of other things.
First of all, there's another way to measure GDP. I won't get into the details, which has still been growing. And that's -- you know, that's counter-evidence.
But the jobs numbers -- it's not a recession when the economy is creating almost 400,000 jobs a month. It's just not anything that looks like a normal recession. We may get there. In fact, I think we probably will.
But I think even if the number is negative two quarters in a row, and even it's become a big political number, it's a technical recession but it's not really a recession. It's not what economists will adjudicate later as a recession. It won't be marked down as one.
ROMANS: Yes, and adjudicate later is really important there. There is a committee -- a cycle dating committee at the National
Bureau of Economic Research. And after the fact, those guys -- those men and women get together and they decide with all of these factors if there was a recession. We won't know, probably, if it was a recession until it's over, probably, anyway.
Nice to see you, Ken.
ROGOFF: So --
ROMANS: Go ahead.
ROGOFF: Thank you, bye.
ROMANS: OK, bye-bye. Thanks.
All right, just --
ROGOFF: Oh, I thought -- I thought you were -- I thought that's what you were saying.
ROMANS: All right, thanks. Nice to see you.
All right. Just ahead, new CNN reporting on the Democrats' strategy heading into the fall midterms. And new research about the origin of the COVID pandemic in China.
ROMANS: All right. The Mets opened the Subway Series in New York with a big win over the Yankees. Andy Scholes has more in this morning's Bleacher Report. Hey, Andy.
ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Christine.
You know, this was the first time ever that the Mets and Yankees were both in first place when they faced off against each other for the Subway Series. And as you can imagine, it was a playoff-like atmosphere at Citi Field last night.
And Aaron Judge wasting no time getting the Yankees on the board with his league-leading 38th home run of the season. Judge is currently on pace to hit 63 homers, which would break Roger Maris' Yankees record.
The Yankees were up 2-0 after the top of the first but the Mets answered quickly with four of their own in the bottom half. Eduardo Escobar crushing a 2-run home run. Check out the nice one-handed grab by that fan. He held onto that beer he was holding as well. He was pumped up as were all the Mets fans. They won the opener of the series 6-3.
And Major League Baseball trade deadline is Tuesday and the Cubs will likely be sellers again this year. And their All-Star catcher Wilson Contreras getting a standing ovation from the Chicago fans last night before what will likely be his final at-bat at Wrigley Field.
Contreras is one of the last stars remaining from that Cubs 2016 World Series title team. He said after the game he loves playing for the Cubs but understands it's a business.
All right. Meanwhile, in Arizona, Giants All-Star pitcher Carlos Rodon not very happy last night after giving up a 2-run home run in the second inning. Rodon accidentally grazed a teammate in the face with his glove while taking out some frustration. And then after the fifth, Rodon kicked a bat in the dugout and hit Thairo Estrada in the leg.
Rodon and the Giants lost the game 7-3. And afterwards, he apologized for his actions, calling them stupid and unacceptable.
All right, and finally, Aaron Rodgers sure knows how to make an entrance. The league MVP strolling up to work at Packers training camp in Green Bay with slicked-back hair, jean, and a white tank top.
Rodgers looking exactly like Nicholas Cage from the movie "Con Air." I mean, the resemblance is stunning, right, Christine? Cameron Poe, all- time great movie character -- and Aaron Rodgers certainly pulled it off.
ROMANS: Aaron Rodgers, wow. I did not see that coming this morning. Thank you for that picture.
SCHOLES: All right.
ROMANS: All right, nice to see you.
Thanks for joining us. I'm Christine Romans. "NEW DAY" starts right now.