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Early Start with John Berman and Zoraida Sambolin

Secretary Blinken Set To Visit Beijing This Weekend; Senators Now Calling For DOJ To Probe PGA-LIV Golf Deal; Fed Announces Pause On Interest Rate Hikes. Aired 5:30-6a ET

Aired June 15, 2023 - 05:30   ET

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

[05:30:00]

ELINDA LABROPOULOU, JOURNALIST: This route has been particularly popular over recent months. It's been the main route that people have been trying in order to reach Europe and in order to reach a new life and safety which, unfortunately, does not seem to be the case for hundreds of people aboard this one ship.

CHRISTINE ROMANS, CNN ANCHOR: Such a tragedy -- women and children in the holds.

All right. Thank you, Elinda, so much for that.

All right, quick hits around the globe right now.

Former British Prime Minister Boris Johnson pushing back against the government panel that found he intentionally misled Parliament in the lockdown party scandal that led to his resignation. In a statement, he accused his accusers of prejudice and called it a quote "dreadful day for democracy."

Tens of thousands evacuated and businesses shut down as the east coast of India and Pakistan hunker down for a massive storm. Cyclone Biparjoy is expected to make landfall today.

And Tijuana's mayor forced to live at an army base after escalating threats from gangs. She said it comes after her administration's crackdown on deadly gang activity.

Just ahead, a New York grand jury's decision on the deadly chokehold incident on the subway. And every day feels like Monday. A new survey on feeling stressed and disengaged at work.

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[05:35:16]

ROMANS: Here is today's fast-forward lookahead.

Today, the Manhattan D.A. will announce a grand jury indictment of the Marine veteran accused in the subway chokehold death of a homeless man. Daniel Penny faces second-degree murder charges. Closing arguments set to begin today in the Pittsburgh synagogue shooting trial. Federal prosecutors rested their case Wednesday as did the defense, which called no witnesses.

President Biden set to announce today that Live Nation and Ticketmaster will show all fees upfront. It's an effort to minimize the frustration of fees adding up late in the checkout process.

All right, feeling stressed at work? You are not alone. Gallup released its new state of the global workplace report on Tuesday. It found globally, 59 percent of employees surveyed say they are quiet quitting, meaning they're not engaged at work. Twenty-three percent say they are thriving at work -- that is engaged. And 18 percent are loud quitting. That's being actively disengaged and letting everybody know about it, I guess.

Let's bring in Jessica Kriegel, chief scientist of workplace culture at Culture Partners. So glad to have you here, especially with all of this amazing new polling.

The polling also showed that the U.S. and Canada have the second-most engaged workers, right, but also the most stressed workers, which I think kind of makes sense in the years after the pandemic. What do you make of it?

JESSICA KRIEGEL, CHIEF SCIENTIST OF WORKPLACE CULTURE, CULTURE PARTNERS: Yes, absolutely. I mean, we are returning to pre-pandemic norms but we still have a post-pandemic mentality. So we're trying to balance this change and how do we adapt to it.

It's interesting because at Culture Partners we do our own research on what makes companies win, and the most adaptive cultures are the companies that have the most profitability. So that dynamic between the old and the new is what all these CEOs are trying to navigate. That is the key to reducing stress. It's the key to increasing profitability.

ROMANS: Sure.

KRIEGEL: We have to be able to adapt.

ROMANS: Does hybrid work mean -- is that an adaptive culture? Because I know this survey found that hybrid workers were more engaged but almost more stressed.

KRIEGEL: Yes. Well, I understand that. I'm a hybrid worker. I'm more engaged. I'm also more stressed. There's a lot to manage.

And the CEOs that are trying to go back to the old playbook and get people back into the office -- they're the ones that aren't adapting.

ROMANS: What should organizations do? I mean, what is your advice to CEOs who are struggling with that -- who are saying I want people to come in more often? But these surveys are showing people are saying no, no, no -- we don't want to do that. KRIEGEL: It has to be flexibility. We have to balance all of these different pulls on our time, all of the different pulls on our mind and our mentality. If we cannot allow our employees to make their life work along with the work that they're doing at the workplace they're going to leave. I mean, we see that in the form of quiet quitting and we see that in the form of loud quitting.

ROMANS: Yes. What does the loud quitting look like?

KRIEGEL: Loud quitting is toxic employees -- someone who is disruptive to the organization. They are creating either passive- aggressive actions in the workplace or they're just actually quitting.

ROMANS: How can companies get people more engaged? Because this survey also found that low engagement around the world costs the economy $8.8 trillion, right? So this is a financial imperative, I guess, if you look at it that way.

KRIEGEL: Absolutely. The Gallup poll actually asked people what can we do to make the workplace better and by far, the respondents in this survey said improve culture. It wasn't compensation. It wasn't even well-being.

So if I'm a CEO and I'm reading that, I'm not going to invest in any more meditation apps. I'm not going to throw money at the problem. I'm going to invest in culture. That's going to drive profitability and reduce stress.

ROMANS: Well, always a great conversation. Jess Kriegel, thank you so much. Nice to see you -- Culture Partners.

KRIEGEL: Thanks for having me.

ROMANS: All right. Secretary of State Antony Blinken heading to Beijing this weekend as the U.S. navigates its tense and complicated relationship with China. Blinken was set to travel there in early February but postponed that visit, remember, because of that surveillance balloon incident.

CNN's Kristie Lu Stout joins me live from Hong Kong this morning. And Kristie, the State Department said both nations came to the conclusion it was now the right time for this meeting. What are the plans? What are the objectives for this trip?

KRISTIE LU STOUT, CNN ANCHOR AND CORRESPONDENT: Yes, Christine, both the U.S. and China confirmed that Antony Blinken will be visiting China this weekend. This will be the first visit by a U.S. Secretary of State to China in five years, since 2019. And the two sides did not say which officials Blinken would meet. We don't know that just yet.

Now, a senior State Department official also says that Blinken is expected to discuss the situation in Ukraine and to repeat a call for peace and stability across the Taiwan Strait.

He was also very cautious about any possibility of a breakthrough. In fact, he said this. These are comments from the Assistant Secretary of State for East Asian Pacific Affairs. Quote, "We're not going to Beijing with the intent of having some sort of a breakthrough or transformation in the way that we deal with one another. We're coming to Beijing with a realistic, confident approach and a sincere desire to manage our competition in the most responsible way possible."

Blinken is also expected to raise the issue of the three wrongfully detained Americans in China, and he's expected to call for appropriate military-to-military communications.

[05:40:04]

Now, earlier, the U.S. Secretary of State had that phone call with China's foreign minister. In Qin Gang's very pointed words, he urged the U.S. to respect China and its core concerns, including the issue of Taiwan.

And according to a Chinese Foreign Ministry readout of that call, the foreign minister said this. Quote, "The U.S. should respect China's position on the Taiwan question, stop interfering in China's internal affairs, and stop undermining China's sovereignty, security, and development interests in the name of competition."

Now, this rift has been deepening between the U.S. and China over trade, over sensitive technology, Taiwan, territorial disputes, et cetera. And U.S. officials hope that this visit by Blinken will pave the way for more meetings, including, Christine, a possible trip by the U.S. Treasury Sec. Janet Yellen. Of course, as you've been following this week --

ROMANS: Yes.

STOUT: -- Yellen told U.S. lawmakers that it is in America's best interest to maintain ties with China regarding trade and that, quote, "Decoupling would be a big mistake."

Back to you, Christine.

ROMANS: You know, hopefully, this meeting can at least cool the temperature for now and pave the way for some more talks.

All right, Kristie Lu Stout, thank you.

STOUT: Thank you.

ROMANS: To the U.S. now. Senators are calling on the Justice Department to review the controversial relationship -- partnership between the PGA Tour and Saudi-backed LIV Golf.

Carolyn Manno has this morning's Bleacher Report. What are they looking into here?

CAROLYN MANNO, CNN SPORTS CORRESPONDENT: Well, they feel like this could create a monopoly over professional golf, and so they're taking steps to really get a little bit more scrutiny on this. I mean, Democrats Elizabeth Warren and Ron Wyden want the DOJ's antitrust division to look into this proposed deal to see if it inhibits competition or if it violates antitrust laws. A lot has been made about this.

The PGA Tour shocking the world last week by announcing this partnership. LIV Golf, as many people know, is owned by Saudi Arabia's Public Investment Fund.

And in a letter to Attorney General Merrick Garland and other senior DOJ officials, Warren and Wyden argue that the merger will allow Saudi Arabia to sportswash its humans rights record, saying, "The PGA-LIV deal would make a U.S. organization complicit and force American golfers and their fans to join this complicity in the Saudi regime's latest attempt to sanitize its abuses by pouring funds into major sports leagues."

Now, the letter comes after Democratic Sen. Richard Blumenthal announced a permanent subcommittee on investigations had launched a probe into the deal, so more to come on this.

But all of this a very unusual backdrop for the U.S. Open, which is set to tee off later this morning at the ultra-exclusive Los Angeles Country Club.

Brooks Koepka, who won the PGA Championship last month, already has five Major titles under this belt and says winning five more is a real possibility.

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BROOKS KOEPKA, 2-TIME U.S. OPEN CHAMPION: Double-digits -- that's what I'm trying to get to. I think it's -- I don't think it's out of the question for me. I think the way I've prepared and the way I've kind of suited my game for these things is going to help me. And like I said, I'm only 33, so I've definitely got quite a bit of time. I've just got to stay healthy and keep doing what I'm doing.

(END VIDEO CLIP)

MANNO: Now, 43-year-old Berry Henson does not have much of a shot at winning the U.S. Open but just being in the field is a huge accomplishment, Christine, for this underdog because to help support his golf career -- he was sidelined by a wrist injury -- the 444th ranked player in the world became an Uber drive in Southern California. And CNN Sports caught up with him ahead of a different kind of opening drive in L.A. Take a listen.

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BERRY HENSON, GOLFER, PART-TIME UBER DRIVER: I've got 3,000 rides and I'm a 4.99 Uber-rated driver, which I love. And I feel -- you know, I take pride in that. I like to play games with my -- with my -- with my passengers when they come in. I usually let them ask me questions to find out what I really do and I can only answer yes or no. And that ends up turning into being fun because they go down, like, this weird road of entertainment business and being in the movies or whatever it might be.

(END VIDEO CLIP) MANNO: That's a really fun story.

And a party 47 years in the making finally happening in Denver this morning. The Mile High City celebrating the Nuggets' first-ever NBA Championship with a parade and a rally downtown.

Finals MVP Nikola Jokic is going to be there. But his trophy might not be there because the Serbian superstar told ESPN that he left it in the equipment manager's room, but then it was not there when he came back to get it.

(BEGIN VIDEO CLIP)

NIKOLA JOKIC, 2023 NBA FINALS MVP: I really don't know. I left it in Sparky's room and it's not there anymore. So I don't know. But hopefully, it can arrive in my house.

(END VIDEO CLIP)

MANNO: That is Nikola Jokic in a nutshell -- in a nutshell. Like, completely relaxed. I don't know where it is but maybe I'll find it. No big deal.

ROMANS: That's his nice way of saying send it to my house, please, right now, all right?

MANNO: Yes.

ROMANS: All right, nice to see you. Thanks, Carolyn Manno.

All right. Coming up on "CNN THIS MORNING" a new report says former President Trump's lawyer suggested trying to get a settlement to avoid the classified documents indictment. Why Trump was not interested.

And next, right here, bad news for investors hoping for interest rate cuts later this year. How long Fed chief Jerome Powell says they're going to have to wait.

[05:45:00]

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ROMANS: Your Romans' Numeral this morning, two. Fed chair Jerome Powell says we're looking at about two years before the central bank cuts interest rates again.

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JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: It will be appropriate to cut rates at such time as inflation is coming down really significantly. And again, we're talking about a couple of years out, I think.

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ROMANS: No rate hike yesterday. Investors have been betting on a rate cut later this year -- some had -- but not a single policymaker forecast one. Powell says since inflation has not responded much to the recent hikes, the Fed is going -- is, quote, "Going to have to keep at it."

Looking at markets around the world right now, Asian markets finished mixed. Consumer and factory activity in China weakened in May. European markets are lower ahead of a critical European central bank decision.

And on Wall Street, stock index futures right now just tipping a little bit lower. I wouldn't call that decisive, though.

[05:50:00]

Stocks finished mixed. As we mentioned, the Dow and the S&P ended the day lower after the Fed chief said interest rate cuts are still a couple of years out. Powell says inflation hasn't fallen enough. We learned yesterday producer prices grew only 1.1 percent in May.

Gas prices held steady overnight at $3.59 a gallon but, look, that's down 25 percent from those record highs a year ago.

Jobless claims and retail sales data are due out later this morning.

So, after 10 interest rate hikes in a row over 15 months, the Federal Reserve paused interest rates on Wednesday, although that could be temporary.

(BEGIN VIDEO CLIP)

POWELL: Looking ahead, nearly all committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down to two percent over time.

(END VIDEO CLIP)

ROMANS: Let's bring in Rachel Seigel, an economics reporter at The Washington Post. So nice to see you this morning, Rachel.

Talk to me about the Fed chief and what he's telling us about inflation. I mean, we saw, this week, consumer prices clearly retreating -- half of the level they were at the peak. Producer prices at 1.1 percent -- that's below pre-pandemic -- the pre-pandemic average. But he is looking at the core inflation and still concerned?

RACHEL SIEGEL, ECONOMICS REPORTER, THE WASHINGTON POST (via Webex by Cisco): He's looking at core inflation and still concerned about some of those sources of price increases that can be the most difficult to root out of the economy.

Earlier this week we had the Consumer Price Index. And even though that isn't the main inflation gauge that the Fed pays attention to it really echoed this message that some of these sticky sources of inflation that don't have to do with really volatile categories like food or energy really are just now showing much ground. That's part of the reason the Fed expects to have to continue to raise rates this year. But there are a lot of unanswered questions about what exactly will push them over the line to announce another rate hike.

ROMANS: Yes, a lot of unanswered questions. And the -- and the Fed chief himself saying there are a lot of uncertainties. I mean, you asked him yesterday how long it takes for the rate hikes to be felt in the economy -- that lag effect. Here's part of his answer.

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POWELL: I can't point to an ultimate endpoint. I can't point to a specific data point. I think we'll see it when we see inflation really flattening out reliably and then starting to soften. I think we'll know that we're -- that it's working.

(END VIDEO CLIP)

ROMANS: I mean, pretty honest -- we'll know when we know but we don't know now.

SIEGEL: That's right. And part of the reason that I was curious to ask Chair Powell that question is because he's been saying for a long time that interest rates have lags. That those lags are uncertain and that it means that there is likely more of this tightening coming through the pipeline.

But I was trying to square that with the decision to skip a rate hike for now to ask basically, what will you be looking for? What will be telling over the next couple of months or through the end of the year. And his answer was we'll know when we see it. But it will be interesting to see how they explain what that ends up looking like when it comes down to it.

ROMANS: This was also one of those meetings where they give new forecasts for the economy. And I thought it was interesting. Their forecast for unemployment actually improved, right? I mean, they think the job market is maybe a little stronger than they had thought. And even the overall economy for this year -- they upgraded their growth expectation for this year, although not for the next couple of years out.

What do you make about what that says about the success, so far, of all these rate hikes?

SIEGEL: Those figures really seem to come in line with this somewhat remarkable phenomenon that parts of the economy have stayed really strong through high inflation and through the Fed's rate hikes. We have seen the job market continue to grow month-by-month like gangbusters. Economic growth and consumer spending have all continued to come in better than expected.

And I think the Fed is signaling there that they expect that to continue. That even though they're saying we think we might have to push a little bit further on inflation they're not expecting that to undermine those real strengths of source in the economy.

ROMANS: Is there a possibility, Rachel, that all of this confusion in the economy -- meaning, strengths in some parts but much higher interest rates -- is this what a soft landing could maybe look like?

SIEGEL: It certainly could look like it. And it's been remarkable to see that these expectations for a looming recession or that the economy is barreling towards a recession -- that has not happened yet. The Fed has managed to raise interest rates by five percentage points in back-to-back meetings with whopping hikes, and that has just really fooled all of the economic models that would suggest that you would have real economic slowing and a real hit to the job market as a result.

I think that also gives the Fed a bit of room to say even though we've done so much work and even though we now think it's time to step back, they think that they still have an ability to tweak interest rates up a little bit if they need to, seeing that hasn't led to real catastrophe for the economy so far.

ROMANS: Sure.

All right, nice to see you, Rachel Siegel of The Washington Post. Thank you.

SIEGEL: Thank you.

ROMANS: All right. A new report says former President Trump rejecting his lawyer's efforts to avoid indictment in the classified documents case. Details of that ahead.

And four men in the 60s charged in two brazen jewel heists. How prosecutors say they pulled it off, coming up on "CNN THIS MORNING."

[05:55:00]

(COMMERCIAL)

ROMANS: Our top of the morning, the top TV shows streaming right now.

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Clip from Apple TV+ "THE CROWDED ROOM."

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ROMANS: "THE CROWDED ROOM," starring Tom Holland and Amanda Seyfried, tops Reelgood's trending list.

Here's number two.

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Clip from Peacock's "BASED ON A TRUE STORY."

(END VIDEO CLIP) ROMANS: That's "BASED ON A TRUE STORY" with Kaley Cuoco and Chris Messina.

[06:00:02]

And number three.

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Clip from Prime Video "SHINY HAPPY PEOPLE: DUGGAR FAMILY SECRETS."

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ROMANS: The docuseries "SHINY HAPPY PEOPLE: DUGGAR FAMILY SECRETS" number three.

All right, thanks for joining me this morning. I'm Christine Romans. "CNN THIS MORNING" starts right now.