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Early Start with John Berman and Zoraida Sambolin

"Conversation Has Commenced" Over U.S. Soldier In North Korea; Greece May Reach Record High Temps, Fueling Wildfires; Fed Expected To Raise Interest Rates This Week. Aired 5:30-6a ET

Aired July 25, 2023 - 05:30   ET




NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT (voice-over): Yulia (PH) got nothing -- no body -- just a letter from the military saying Andriy (PH) had died the very day he left jail.

YULIA, ANDRIY'S MOTHER (translated by text): The hardest part was that I was afraid he would kill someone. Because I can live with my son as a drug addict, but with my son as a murderer, it was difficult for me to accept it.

WALSH (voice-over): The horror Russia inflicts on Ukraine, it seems, matched nearly by that (INAUDIBLE).

Nick Paton Walsh, CNN, London.


CHRISTINE ROMANS, CNN ANCHOR: Wow, what a power piece, Nick. Thank you for that.

Quick hits around the globe right now.

Ecuador's president set to hold an emergency cabinet meeting after a mayor is killed and 90 prison guards are held hostage at five prisons. A state of emergency has been declared over the violence.

The Philippines and Taiwan bracing for a super typhoon that has formed in the Pacific. Typhoon Doksuri is headed their way in the next 24 hours with winds around 150 miles an hour.

Iran has banned an annual film festival after a promotional poster showed an actress not wearing a head scarf. The minister of culture and Islamic guidance deemed it inappropriate.

An official with the U.N. Command says a conversation has commenced with North Korea over the fate of a U.S. Army private, Travis King. King, of course, sprinted across the border between North and South Korea last week while on a civilian tour. That happened the day after he was supposed to be returned to the U.S. while facing military discipline. CNN's Marc Stewart is following this story from Tokyo. Mark, so nice to see you. What more do we know about these allegations and these negotiations now with Pyongyang?


Look, this is complicated because right now, the United States and North Korea have no formal diplomatic relationship, and even though the United States did make an overture to North Korea it has heard nothing back.

So, indeed, the United Nations Command, which you mentioned, is having a big role in this discussion. We heard from a top leader there that communication lines are open and that a discussion has begun. But Christine, we still do not know the location of the soldier, his well- being, his health, how he's doing, as well as any possible next steps. This still remains very murky.

ROMANS: And Marc, we understand China has now sent a delegation?

STEWART: China has sent a delegation. This is not necessarily related to this particular case but it is the first time we have seen high- level leadership from China in North Korea since the pandemic. China, of course, seen as an ally for North Korea. So we're keeping watch on that.

By the way, Christine, I should tell you that late last night, early this morning we tracked two more missile launches -- short-range ballistic missiles -- not necessarily connected to any of these events but something that we are certainly going to be keeping a watch on in the hours and days ahead.

ROMANS: All right, of course. Marc Stewart, so nice to see you. Thank you, Marc, from Tokyo.

Eight days of raging fires in Greece has a top EU official saying this could be the new normal. And a record billion-dollar one-year contract for a soccer player. Details just ahead.



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

The special counsel's grand jury meets today to hear more evidence in the investigation into efforts to overturn the 2020 election. The special counsel now has new documents about the false claims of widespread voter fraud peddled by former Trump lawyer Rudy Giuliani.

President Biden will sign a proclamation today establishing a new national memorial honoring Emmett Till. The 16-year-old was killed in 1955 after he allegedly whistled at a white woman.

Are you feeling lucky? The Mega Millions jackpot has grown to $820 million. That's ahead of today's -- tonight's drawing. It's now the fifth-largest grand prize in the lottery's history.

A relentless heat wave in Greece fueling out-of-control wildfires across that country. Greek firefighters are receiving help now from several other countries as they struggle to contain the blazes. But they still face an uphill battle as temperatures may reach all-time highs in the coming days.

Elinda Labropoulou live in -- right in front of the Acropolis in Athens for us this morning. Where are the worst fires burning, Elinda?

ELINDA LABROPOULOU, JOURNALIST: At the moment, the worst fires are in Rhodes. That's a big fire that's been raging for over seven days now, prompting massive evacuations -- the biggest in Greece's history. But we just had news that parts of Corfu, an island where fires have been also raging for a number of days, is now being evacuated.

So it seems like this fire is actually moving. It's not -- it has not been contained yet. And there's another large fire on the island of Evia. So three big fires burning in Greece right now.

The Greek prime minister has described the situation as being at war -- a war with the fires in the country -- and has pledged to do his best to compensate all those who are losing their property. They're losing -- you know, Greece is, right now, in the middle of its peak tourism season. This has caused huge problems in the industry in Greece as people are leaving the islands most affected.

Also, the heat wave is at its peak in Greece. It's been the longest heat wave that the country has experienced in a very long time. We expect sweltering temperatures of over 110 Fahrenheit today and tomorrow before temperatures go down again.

And this is, of course, impacting tourism. Right behind me, the Acropolis of Athens has been closing during the warmest part of the day. Today we expect it to shut down for a number of hours very soon. This means more and more people are trying to get in as early in the day as possible. So we've seen lines of people in this heat just waiting to visit the Acropolis.


And basically, a debate once we get to the -- going beyond the fires and what's actually happening now is obviously, a climate crisis. Is this a phenomenon that we're going to see more of? And how is this going to impact the country and its citizens as well as the visitors, Christine?

ROMANS: All right, Elinda. A beautiful picture but it is certainly very, very sweltering where you are. Thank you so much.

All right, former Northwestern quarterback Lloyd Yates is opening up about the hazing and sexual abuse he says he endured while on that team.

Andy Scholes has this morning's Bleacher Report. Hey, Andy.


So, civil rights attorney Ben Crump filed a lawsuit on behalf of Lloyd Yates against the school yesterday -- the fourth claiming members of the football program engaged in a culture of hazing for years.

Now, Yates played for the Wildcats from 2015 to 2017 and is the first plaintiff to identify himself in a lawsuit against the school. He says he was sexually assaulted by his teammates as a part of ritual hazing. The lawsuit alleges that the hazing was, quote, "In an effort to break them, punish them, control them, or get them in line."

Now, this latest lawsuit comes about a week after longtime head football coach Pat Fitzgerald was fired as a result of this scandal, though an investigation found no credible evidence that Fitzgerald was aware of alleged hazing. The university president said he is still ultimately responsible for the team's culture as the head coach. Fitzgerald has denied any knowledge of the hazing in the program.

Now, Yates, meanwhile, spoke to CNN last night about what he calls the school's toxic culture.


LLOYD YATES, FORMER NORTHWESTERN QUARTERBACK: I really hope by me speaking forward and coming out that this prevents any future athletes from going through what I had to endure and what many of my former teammates and colleagues had to endure.

At the time, I think we were really embedded in a culture that really just normalized this kind of stuff. That made it seem that this is what we do when you play college sports. This was the culture at Northwestern. This is how you become accepted and earn respect from your teammates.


SCHOLES: All right. Elsewhere, an American is making history at the World Cup but it was not for Team USA. Sixteen-year-old Casey Phair, from New Jersey, becoming the youngest player to ever play in the tournament when she entered as a sub for South Korea. Phair's father is American and mother is South Korean. She's the first dual-national and mixed-race player to play for the South Korean Senior National Team. They would lose to Colombia in that one 2-0.

The U.S. women, meanwhile -- they're going to take the pitch for their second game tomorrow night at 9:00 Eastern against the Netherlands. The Dutch are the U.S.'s toughest test in the group. This is a rematch from the 2019 championship game that the U.S. won 2-0.

Star forward Alyssa Thompson just 14 years old at that time and she remembers watching that game but never imagined she'd be a key member of the team at this World Cup.


ALYSSA THOMPSON, USWNT FORWARD: In that moment, I wasn't really thinking about oh, the next one I'm going to be at because I felt so young and it felt like so far away. But being here now is crazy to me because I didn't think about it in the moment.


SCHOLES: All right. And finally, soccer superstar Kylian Mbappe has been offered a jaw-dropping amount of money to go play in Saudi Arabia. So the soccer club Al-Hilal bid $332 million to Paris St.- Germain for the opportunity to sign Mbappe.

And according to multiple reports there offering Mbappe $776 million for just one season. In case you were wondering, that's $14.6 million a week; $2.1 million a day. He'd be getting $24.00 per second.

Even NBA stars, Christine, couldn't believe that contract. Giannis Antetokounmpo tweeting "Al-Hilal, you can take me. I look like Kylian Mbappe." All right -- and Mbappe -- he loved it. He replied with some laughing emojis.

But lots of NBA players, including LeBron, even tweeting like hey, you know, give me that kind of money. I'll be there in a second. But there are some reports Christine that he's actually not interested in the offer. But, I mean, $776 million.

ROMANS: It's just --

SCHOLES: Everyone's got a price at some point, right?

ROMANS: It's just mind-boggling, like, trying to get around how much money that is. But he is an amazing player. He is so fun to watch --


ROMANS: -- and so talented. I don't know.

SCHOLES: We'll see what happens.

ROMANS: I think he's worth it. I think he's worth it --


ROMANS: -- but it's up to him.

All right, nice to see you.

SCHOLES: All right.

ROMANS: All right. Coming up on "CNN THIS MORNING" mines have been discovered on the Russian-occupied Zaporizhzhia nuclear power facility in Ukraine. How officials are responding.

And next, right here, investors expecting yet another rate hike as the economy remains resilient. What happened to the recession we were warned about?

(COMMERCIAL) [05:48:42]

ROMANS: Your Romans' Numeral this morning is 11. The Dow up 11 days in a row -- the longest winning streak since back in 2017. You can credit stronger-than-expected corporate earnings, cooling inflation, and a still resilient consumer. The next big event is the Federal Reserve's interest rate decision on Wednesday.

Looking at markets around the world right now, Asian markets mixed. But look at this -- the Hang Seng jumped four percent. China vowed to provide stimulus to boost its ailing property market. Looking at European markets, they have opened here this morning.

And on Wall Street, narrowly mixed here. You know, markets finished yesterday with another really good day. The Nasdaq and the S&P higher. And a new report shows Morgan Stanley raising its U.S. economic growth forecast for the year, citing Bidenomics unleashing energy in the U.S. economy.

On inflation watch, the price of gas rose four cents overnight to $3.64 a gallon. Alphabet and Microsoft will report earnings later today. And the Federal Reserve will also kick off its two-day policy meeting this morning.

All right. Today, the Fed will meet for its two-day policy meeting where it is expected they will raise interest rates by another quarter point. That would be the 11th increase since March of 2022.

I want to bring in Ken Rogoff, esteemed professor of economics and public policy at Harvard University, and former IMF chief economist. Ken, so great to see you bright and early this morning.



ROMANS: So, Ken, what is going on? All of these interest rate hikes, a pause by the Fed but they're expected to raise rates again this week. And the economy remains resilient.

Is it possible -- is it possible this dreaded recession will be avoided?

ROGOFF: It is. I mean, I think we're a long way from being able to declare victory, particularly if the Federal Reserve really, really, really wants to get inflation down to two percent, say, in the next year or so. It still looks very hard. But it didn't seem possible before.

We haven't seen a series of interest rate hikes this fast, this dramatic in decades -- and every time we've seen one we have a recession.

I mean, look at the mortgage rates, more than doubled. If you want to take out a loan to buy a car. Look at consumer credit. Look at what businesses have to pay. It usually brings on at least some recession. It hasn't yet and it and you particularly see that in the labor market.

I think if we're talking about growth overall of the economy, the data is murky. There are somewhat mixed signals there of what's going on. But the economy has fooled everyone.

ROMANS: Yes. This has been the longest recession watch I can ever remember. And all along the way, Janet Yellen and the Fed chief have said no, no, a soft landing is still possible.

I'm wondering if the Fed, though -- you say if Jay Powell and the Fed decide they really want to get down to two percent on CPI, that would be more rate hikes and that could tip the economy into a recession?

ROGOFF: It depends on how long they're willing to wait. There is a lot of inflation inertia still in the system. What we're seeing is that goods prices -- you know, things like used cars -- came down. Went up a lot and then they came down really fast, and that has flattered the headline Consumer Price Index. But if you look behind that to services, restaurants, hotels, dry cleaners, and things like that, there are still lots of pent-up inflation. The demand is really strong.

The labor market is really strong in many places. Usually, when the labor market is this strong and there's that much pent-up demand, you get inflation for a while.

I think the Fed expects that. They do not think they have won this battle but they certainly will be patient. I think what markets are thinking is well, if inflation keeps going down they'll start lowering interest rates and stop raising them. I think that's an open question. If the Fed really wants to present sooner they may have to do that.

Now, why do they care so much? The thing is, so far, we haven't seen inflation expectations built into interest rates. People have gotten used to low inflation so they're not building it into their price increases, wage increases, interest rates. But if that happens, then it gets harder to get it out of the system. You've got to convince people no, no -- we really did mean two percent.

So that's the tightrope the Fed is still walking.

ROMANS: Ken, let me ask you. There was this research note from Morgan Stanley where they forecast 1.9 percent growth for the first half of this year. That's quadruple what they had thought before. I mean -- and they pointed to infrastructure investments and Bidenomics -- the president's economic policies.

How much do White House policies have to do with the resilience we're seeing in the economy right now?

ROGOFF: I think it's hard to say. I mean, a lot of the policies are really geared towards coming years and not so much falling now. I really give the White House an A+ for not leaning on the Fed to stop raising interest rates if you want to know why inflation is coming down. And that's really the thing that's calming people is that they stood back and let the Federal Reserve take over. If things go south, of course, they may feel differently.

I mean, I think a lot of Bidenomics is really addressed at things like trying to prevent climate change. Trying to redistribute income more effectively. But I'm not sure so much there's stimulus.

Although I will grant that a lot of money has been coming from Europe -- that they were spending on investment in Europe they're now spending on the -- in the U.S., particularly because of the so-called Inflation Reduction Act. The Europeans are mad about that and they may counter, and then that lift to our economy may go away.

ROMANS: Fascinating.

All right, Ken Rogoff. Really nice to see you, Ken. Thank you.


ROGOFF: Thank you, Christine.

ROMANS: All right. Special counsel Jack Smith seeking information about an Oval Office meeting where former President Trump praised security improvements of U.S. elections. How this could affect the investigation ahead.


ROMANS: All right. Legendary rocker Brian May returning to his scientific roots.




ROMANS: Queen's lead guitarist is also an astrophysicist who left academia to co-found the band with Freddie Mercury. May will co-author the world's first complete atlas of an asteroid. The book comes out Thursday.

All right. Britney Spears now a member of Spotify's billions club.





ROMANS: Her 2003 hit "Toxic" has reached a billion streams on Spotify, joining Abba's "Dancing Queen" and Whitney Houston's "I Wanna Dance With Somebody." A billion -- wow. All right, thanks for joining me. I'm Christine Romans. "CNN THIS MORNING" starts right now.