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First Move with Julia Chatterley
Iranian Hardliner Set to Win after Rivals Disqualified; E.U. Set to Lift Restrictions on Visitors from 14 Countries Now; China set to Administer a Billion COVID Vaccines by the Weekend. Aired 9-10a ET
Aired June 18, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:10]
PAULA NEWTON, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Paula Newton, in for Julia Chatterley. This is FIRST MOVE and here is what you
need to know.
The Iranian election. Hardliner set to win after rivals are actually disqualified.
A travel take off. The E.U. set to lift restrictions on visitors from 14 countries now.
And doses delivered. China set to administer a billion COVID vaccines by the weekend.
It's Friday. Let's make a move.
And a warm welcome to everyone. Once again, good to have you here live from the New York Stock Exchange on this last trading day of the week and it is
going to be an interesting one.
Buckle up people, that's what I'm telling you. We are now bracing for an early session selloff for U.S. stocks. You see it there amid new
uncertainty over when the Fed will begin raising interest rates.
Now, here's what's interesting. The President of the St. Louis Federal Reserve, James Bullard said in an interview today that the Fed could begin
hiking rates as soon as next year; now, an earlier timetable than the markets had been expecting.
Europe, as we watched the markets actually did turn lower as well on the news; meantime, to Asia, where it's been a mixed day with commodity
weakness, helping with that pressure on mining shares. The Japanese Central Bank meantime announcing that it is keeping its pandemic stimulus in place
for another six months. Perhaps that's not a surprise as COVID restrictions continue to weigh on that country's economic performance.
And we will be following the market action for you throughout the next hour here on FIRST MOVE. A lot of action, especially on this trading day where
it is also triple witching. But first, we want to get right to those main drivers.
Iranians are voting for President. They will pick the successor to Hassan Rouhani as he finishes his second and final term. Now, the election comes
as Iran negotiates with the United States and European countries to try and revive that all important 2015 nuclear deal.
Our Fred Pleitgen is there for us in Tehran. So, good to have you there, Fred, on the ground. Now, this election is not really a test for moderates
anymore, is it? They've already been defeated in the sense in Iran. I've been reading about how this whole process has been quite dispiriting for
many Iranians, what have you been hearing from them on the ground?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, there certainly are some people who are quite disillusioned, but I think also for
the moderates, and especially those who in the past supported Hassan Rouhani, I do think, Paula, that there is a good deal of issues with the
politics of the past couple of years.
There's a lot of people who are quite disappointed in Hassan Rouhani, who are disappointed in the economic situation, especially in this country. Of
course, all that given the fact that he is facing those tough sanctions that President Trump put in place.
So, with this election coming, the main front runner is obviously Ebrahim Raisi, who is very much a conservative. There is a moderate challenger
called Abdolnaser Hemmati, but there is not many people who believe that he might have a chance, although our crew spoke to him, and he said he might
be able to or he believes he might be able to pull off a last minute surprise.
There were people who believed that the turnout would be quite low at this election. I want to show you though, you can see here at the polling
station that we're at right now, which is actually one of the main ones in Tehran. There are actually people coming in, they are casting their
ballots.
We have been at three polling stations here in Tehran so far, and all of them did have a decent amount of people here. I wouldn't say that it's as
many as we saw in 2017; also covering that election back then when Hassan Rouhani got re-elected. There certainly were people who were turning out.
It really looks as though, you're absolutely right, there is going to be a turn to more conservative politics here in this country. However, it also
is the case that that is not going to affect the negotiations about the Iran Nuclear Agreement, because that's something where Iran supreme leader
has already said that he supports those negotiations to get that agreement back on track -- Paula.
NEWTON: Yes, it's fascinating, Fred, just to kind of see you there at a polling station. We know that the reflex for Iranians is to be politically
involved, and it's been interesting to read about what might be a little bit of apathy.
But as you so rightly pointed out, let's wait to see what happens today. I want to get back to that economic situation and the lifting of the
sanctions, which really is really dampening the effect of this right now.
Do they believe that with the new Biden administration, the fact that they were trying to jumpstart these nuclear talks that this will pull through
and ultimately help what is a struggling economy?
[09:05:01]
PLEITGEN: Well, it certainly looks as though right now, as far as the negotiations to revive the nuclear agreement that there is still pretty
good hope that it will be pulled through. I think the thing that the negotiators in Vienna, or where they are in Vienna are trying to achieve is
they're trying to get the nuclear agreement back on track before the new administration takes office. So, that would be in August.
So, the election is obviously today there's going to be a new incoming administration, but they do want to get a try and get the U.S. back into
the nuclear agreement and get Iran back into full compliance.
Now, the Iranians, of course, hope that that would mean windfall economic benefits for them. First and foremost, of course, as we know, Paula, that
means selling oil and that means selling gas. That's the first immediate thing where they think that they can get some reprieve.
But then also, if you speak to a lot of people, we can look at some more people voting while I say this. If you speak to people here in this
country, they obviously say they want to do business again. You know, Iran is actually a country with a lot of people who are very good at doing
business internationally. It's something that we actually saw when the nuclear agreement first came into place.
There were Iranians who were living abroad who were coming back who were starting businesses here, they all want to get back to that. They want to
be in the international financial system again. They want to be on electronic payment systems again. That's what the Iranians want.
Now, there are of course, certain sticking points as to getting the nuclear agreement back on track. The Iranians, for instance, want more sanctions
lifted it seems, and the U.S. right now is willing to give. Those are the things that they want to sort out.
But by and large, you do feel, you speak to people here, obviously, right now, the sanctions are crushing, and they do hope that if there is an
agreement with the U.S. and other countries to revive that nuclear agreement, if they could get business back on track, and hopefully get the
countries back on, the economy back on track as well -- Paula.
NEWTON: Yes, a lot of expectations riding not just on this election, but as you've been saying on that all important deal. Fred, it is so good to
have you there. Again, we will continue to follow Fred's updates throughout today and on the weekend right here on CNN.
Now, some good news for Americans hoping to travel to Europe this summer, the E.U. plans to lift travel restrictions for visitors from 14 countries,
and yes, that includes the United States.
Anna Stewart joins us now. You've been following all of this, Anna, as the announcements come out in the last few hours. But you know, uncork all of
this for us. Help us unpack it. There seem to be some limitations here.
ANNA STEWART, CNN REPORTER: Yes, Paula, before you pack your bags for Mykonos or Provence or Venice, you can only dream, right? There are a few
things to think about. The first one is although American tourists are now allowed into the E.U. in terms of they've said nonessential travel is now
allowed, you can go. Fully vaccinated travelers may not need any kind of test at all.
However, each nation within the E.U. actually gets to decide their own rules. So, you will need to check what the entry requirements are. Some
will need a PCR test, some won't. Of course, obviously, all of that can change as well.
On top of that, one big limitation for airlines particularly is this is a great move, a significant milestone, but actually, it is only really one
way traffic because currently Europeans can't holiday in the U.S., because the U.S. travel ban is still in place.
So, great news for airlines halfway there to recovery, but not fully there. And you know what? Europe needs tourists. It's such a big part of the
European economy. American tourists, particularly, they spend more other than China than any other tourists in the world. They normally account for
around five percent of international arrivals.
So, this is certainly a moment to celebrate for travel and tourism. But as you say, a few restrictions still in place there.
NEWTON: Yes, quite a few, and the whole issue of how do you prove that you've been vaccinated? And by the way, thank you very much, because my
daughter has been nagging me enough with pictures of Europe and where we're supposed to be going in the months to come.
I really want to get to the U.K. here. This is a point of huge angst for the U.K. in terms of where they are allowed to go. But also any kind of
reciprocal permission that the U.K. will be giving for people to enter their country.
STEWART: And U.K. airlines a particularly feeling this. So, they are feeling left behind because the U.K. is not included on Europe's new nice
white list like the United States of America. It's also not welcoming tourists from the U.S. either.
So, this is a big problem, particularly for U.K. airlines. You really rely on the transatlantic route. Virgin Atlantic is one airline, actually 70
percent of their network is that transatlantic route, so they are really calling for the government to make a change on this. Ryanair boss and the
head of a big airport group in the U.K. are actually taking the government to court mounting a legal challenge regarding the ever changing travel
policy here in the U.K.
But Paula, the problem is the delta variant really does have a hold of the U.K. We've just had new data released that shows it accounts for 99 percent
of new cases. And of course, the country is not fully vaccinated yet -- Paula.
NEWTON: Yes, you do feel as if perhaps some of these countries are getting ahead of themselves when you see what's going on in the U.K. with that all
important delta variant.
Anna Stewart, have a great weekend. It was good to see you here this week, and I'll catch you next time. Thanks so much.
STEWART: Nice to see you, Paula.
NEWTON: Appreciate it.
[09:10:01]
NEWTON: Now, China's Coronavirus vaccination campaign is now in full swing. By this weekend, it is expected to reach one billion with a B doses
administered and that's about 40 percent of the shots given out so far, right around the world.
Ivan Watson is live with me here in Hong Kong. Ivan, I appreciate you keeping on top of this, because, I mean, of course, it's important for the
whole world in terms of when China gets fully vaccinated.
In terms of -- you know, in real terms, the numbers seems huge, but where are we in terms of percentage of the population vaccinated?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, I think that we we've heard from a government adviser who has projected that perhaps 40
percent of the population in China, its 1.4 billion people could be vaccinated by the end of June.
I think what we see in this surge of vaccinations where we're expecting up to a billion doses, by the end of this week administered is an example of
how China's kind of top down management of its healthcare system kind of can deliver.
Sure, China stumbled where the coronavirus was first detected in the City of Wuhan at the end of 2019, and really struggled initially. But we've seen
that when China, when the central government, the one party system puts its mind to it, it can get results. It can lock down entire cities and begin
mass testing of millions of people within a matter of days.
And in this case, you had China where at the end of March had only had about a million doses administered that's three months ago. Now, China is
putting shots into the arm to the tune of around 20 million doses a day. That's the figure officially from last Tuesday.
So, it has just ramped up its vaccination program at a dramatic scale, and we're seeing the end results of this where, I think, statistically around
40 percent of the COVID-19 vaccination shots globally have been administered in China -- Paula.
NEWTON: Yes. And you make such a good point about the way they can surge the testing because they've been surging the vaccines which we've covered
here on FIRST MOVE because they've had those outbreaks in port cities in China, and it's been important for them to surge the vaccine to those
areas.
Ivan Watson, have a great weekend. Thanks for staying up late for us there in Hong Kong. Appreciate it.
These are the stories making headlines, meantime, right around the world. Taiwan has just received a new shipment of 240,000 Moderna COVID-19 vaccine
doses. The island is battling to contain a spike in cases, but has in fact one of the lowest vaccination rates in the world.
Now, a new vaccine developed right in Taiwan could be a game changer. CNN's Will Ripley has more in this exclusive report.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice over): At Medigen Vaccine Biologics Corporation --
RIPLEY (on camera): You must be so busy right now?
UNIDENTIFIED MALE: Yes, sure.
RIPLEY (voice over): You can feel energy in the air. This company is the first in Taiwan to submit its COVID-19 vaccine to government health
officials for Emergency Use Authorization.
Taiwan's President Tsai Ing-wen when hopes locally made vaccines will be ready for the public by late next month. Taiwan is battling its most severe
outbreak of the pandemic. The government is struggling to get enough foreign vaccines in a region where China often calls the shots.
Cross strait tensions are high. Taipei accuses Beijing of blocking access to foreign vaccines, a claim China denies. That makes the work happening
here crucial.
RIPLEY (on camera): This is the room where they package and label box after box of these single dose syringes. Each box contains a hundred of
these, and the company says, they can scale up production and eventually produce 40 to 50 million doses a year.
CHARLES CHEN, CEO, MEDIGEN VACCINE BIOLOGICS: On one hand, I feel excited that our vaccine is coming. But on the other hand, I also feel very sad,
even one month earlier, maybe we are able to save more people's lives.
RIPLEY (voice over): This is Medigen's CEO, Charles Chen's first interview since his company applied for Emergency Use Authorization.
RIPLEY (on camera): What would you say to people here in Taiwan who might be reluctant to take a domestically produced vaccine?
CHEN: Ones the data and the result is transparent and convincing, I think people are very much then being convinced.
RIPLEY (voice over): Chen says that data shows their vaccine is safe. It produces antibodies in 99.8 percent of patients. What they don't know is
the efficacy rate. Taiwan had almost no active cases until just over a month ago.
RIPLEY (on camera): How do you develop a vaccine when you don't have active cases?
PAUL TORKEHAGEN, OVERSEAS BUSINESS DEVELOPMENT DIRECTOR, MEDIGEN VACCINE BIOLOGICS: This is a difficult question.
RIPLEY (voice over): Overseas Business Development Director Paul Torkehagen says Medigen just finished Phase 2 clinical trials.
[09:15:04]
TORKEHAGEN: So, what we did was we designed a really, really large Phase 2. Usually a Phase 2 is about a few hundred people. Our Phase 2 was 3,800
participants. So, we wanted a very large amount of safety data.
RIPLEY (on camera): Since you don't know efficacy, is it too soon to get emergency use and start vaccinating people?
TORKEHAGEN: What's the consequence of not vaccinating and being not protected?
RIPLEY: Will you be getting your vaccine? Your company's vaccine?
CHEN: Yes.
RIPLEY: When it is available?
CHEN: Yes. Yes.
RIPLEY: No question?
CHEN: No question.
RIPLEY (voice over): But there are questions. How effective is Taiwan's vaccine? Here, it is a matter of life or death.
Will Ripley, CNN, Taipei.
(END VIDEOTAPE)
NEWTON: North Korea's leader is admitting the country is suffering from food shortages. Now, the state news agency says Kim Jong-un opened an
important political meeting saying the nation's food supplies were strained, and the situation was getting quote, "tense." He blamed the
pandemic and last year's typhoons.
Israel plans to send about one million coronavirus vaccine doses to the Palestinian Authority. Now, the stock of Pfizer vaccines was set to expire
soon under the deal. The shipment of vaccines intended for the Palestinian Authority later in the year will be delivered to Israel instead.
Still to come here on FIRST MOVE, India's Tata Consultancy Group launches a drive to get employees vaccinated amid a deadly COVID-19 wave.
And Wall Street takes aim at work from home. Morgan Stanley joins the chorus of banks that want people back in the office.
(COMMERCIAL BREAK)
NEWTON: And welcome back to FIRST MOVE live from the New York Stock Exchange where the Wall Street bulls are bracing for an early session sell
off.
Now, we are off our future lows there, but still the Dow on track for its worst weekly performance since January amid blockbuster comments from St.
Louis Fed President, James Bullard. In a new interview, he says he expects the Fed to begin hiking rates next year. The Fed's latest dot plot -- yes,
folks, we are back to the dot plot -- out earlier this week, it doesn't see rates rising until 2023.
So, these comments come as an unpleasant shock for investors particularly in the rate sensitive tech sector. There will be much more to come on this,
I assure you.
And in the meantime, stocks in the news today include German biotech firm CureVac. They are bouncing in European trading after a 40 percent plunge
yesterday. CureVac says it is not giving up on its COVID vaccine despite disappointing results in late stage trials.
Now for the past two months, I don't have to remind you, India has been in the grips of a devastating second wave of COVID-19. Reported cases have now
passed 29 million. That's more than any other country except the United States.
But as the U.S. powers ahead with vaccinations, India is falling behind. Less than one in 20 adults has been fully vaccinated even though India, I
have to remind everyone here, is a key vaccine supplier to the rest of the world. In fact, developed nations received vaccine doses from India.
Now, some companies are trying to change all of this. They're taking matters into their own hands.
Tata Consulting Services is an IT giant with almost half a million employees. It has set up over a hundred vaccination centers right across
the country in a major drive to inoculate its workforce.
Joining me now is N. Ganapathy Subramaniam. He is Chief Operating Officer of Tata Consultancy Services. And apparently, I have permission to call
you, NGS, thanks so much for joining us.
[09:20:17]
NEWTON: I appreciate your time here, because we have been so keen to see how all of this is unfolding now in India. And to start with COVID, of
course. How has your stuff been coping? Has there been substantial progress on getting at least your employees and their families vaccinated now that
you guys have taken matters into your own hands, having open these vaccination centers?
N. GANAPATHY SUBRAMANIAM, CHIEF OPERATING OFFICER, TATA CONSULTANCY SERVICES: Good morning, Paula. Thank you for having me here.
Yes, we prioritized employee safety about 15 months ago. And currently, you know, we have taken up a vaccination drive, we call it the TCS Vaccination
League. And as we speak, about 50 percent of our employees have been vaccinated.
But the problem that we have is, we have to vaccinate all the employees and their dependents. That's roughly about 1.2 million people that we will have
to cover. We have covered about 250,000 of our employees and their dependents so far, so we have quite some distance to go.
NEWTON: And I hear you, because it's not enough to obviously vaccinate the employees, you have to vaccinate all of their families, and I know that
your company is invested in the communities in which your employees live. You want to make sure that they are all healthy and in good shape.
How difficult has it been to actually get the doses? Because as we were just outlining, it's one thing to actually get the system in place, but
doses have been in scarce supply.
SUBRAMANIAM: See, in India, we have a problem of scale, for sure. Vaccines are getting produced. The government as procuring about 75 percent of them,
and then the 25 percent of the vaccines produced are available for private hospitals with whom we have tie-ups established.
So, there is only so much that we have supplies, and we need to work with the private hospitals and ensure that we set up our COVID vaccination
centers based on the availability of vaccines. And it's an operations research problem as well, because one has to really look at the first dose,
and then we have to time the availability of the vaccines for the second dose.
And so you know, we are putting some of our technology skills to use to really plan this out very well.
NEWTON: Are you disappointed that this -- the government has done what they can do, I guess, so far? Are you disappointed that the private sector
has to come in here? Or do you think it's expected at this point?
SUBRAMANIAM: I think it's -- we will have to play our role because there is only so much that the government can do, and we have a huge population.
There are so many people still, you know, living in the below the poverty line. The government has to take care of a lot of them.
So, I think the private sector has to play its role and I'm happy that the government has come up with a vaccination policy, by which you know, it's
open to everybody. Everybody is centrally registered. But then one can go and pay privately and then get them vaccinated or go to the government care
vaccination centers and get them free.
NEWTON: Okay, so perhaps, you don't want to be dragged into this debate. But, I'm going to drag you into this debate. This whole work from home
where we're going to highlight on the show what's going on here in the United States in the next few minutes.
But I want to hear from you. I know that you guys had to transition rapidly to having so many more people work from home when, you can imagine, if it
is a challenge here in the United States and in Europe, what a challenge that was in India. Where are you now in terms of trying -- is a work from
home a new normal, a new reality for your company?
SUBRAMANIAM: I think, you know, some form of hybrid will be the new normal. We quickly launched secure borderless workspaces as we called it,
so that people can connect to our systems, our customers systems seamlessly and work safely.
As we speak, about 97 percent of our employees are working remotely, and in fact, we enabled the remote access to them in weeks, about 15 months ago.
For these 15 months, there have been a lot of learning, for sure, and talent has become a fungible asset, number one.
Technology services work has become location independent. Our employees are happy, our customers are happy. We see some distinct possibility and that
people when they are enabled with the right tools and processes, they are able to be productive, as well as energized with the right level of
employee engagement.
[09:25:08]
SUBRAMANIAM: I think we have done our best and actually made us to announce the board operating model, which we call it as 25 by 25, which
essentially means that we believe that 25 percent of the workforce if they are in the office, then we can make everybody productive, 100 percent of
our employees can be productive and it is sufficient if employees can come to offices for 25 percent of their time.
With a certain amount of flexibility, then people can come two days a week, or one week a month, or otherwise, depending upon the client and project
requirements. But overall, we believe that the future is going to be something of a hybrid model, because our employees felt that there is an
answer finally, to this work life balance. While it has been a concept all along it has left it the individuals now with secured borderless
workspaces, they believe that they have found an answer, which they would like to continue.
NEWTON: So, I don't have a lot of time left here, though. But you're saying that the hybrid model you believe will work going forward and will
actually add to productivity because it adds to wellness for your employees.
SUBRAMANIAM: I think the initial data that we are getting, and it's quite encouraging, and we believe that, you know, overall, there will be a
productivity opportunity, which is definitely there. And the most important thing is you've got to have the right processes, the right technologies,
and the right security framework, all of which we have invested quite a bit as a part of our open agile collaborative location and different
methodologies.
NEWTON: Right. Okay. NGS, thank you so much, Chief Operating Officer of Tata Consultancy Services. I really want to thank you for being here and to
give us some insight into how businesses are coping in India. Appreciate it.
And, we will be right back here on FIRST MOVE with the opening bell.
(COMMERCIAL BREAK)
[09:30:05]
NEWTON: And welcome back to FIRST MOVE. That was the opening bell here at the New York Stock Exchange and there is so much for a slow Friday. We have
a sharply lower market as you can see there to start the trading day with the Dow now falling for a fifth straight session.
Stocks pulling back amid concerns that the Fed will raise rates much sooner than expected. The President of the St. Louis Federal Reserve, meantime,
James Bullard, who is not currently, we have to say, a voting Fed member -- nonetheless says, he expects the Fed to begin raising rates later next
year. So, that's the end of 2022 because the U.S. economy is recovering sooner than expected.
Now investors were expecting hikes to begin in 2023. They are also anticipating a cut in the Fed bond purchases that have helped inject
liquidity into those markets. All of this to help contain inflation expectations.
It is also -- yes, it is -- a triple witching options expiration day here on Wall Street, yes, which means no one is starting the weekend early here
and lots more volatility than usual. Just what we needed, right?
We are glad to have Randall Kroszner here. He joins me now. He is a former U.S. Federal Reserve Governor, and currently a Professor at the University
of Chicago's Booth School of Business. And yes, we are glad to have you here to help us parse all of this.
Look, we've had not 48 hours, but you know, close to, to help parse these comments from Jay Powell and the Fed's assessment of where the data is
taking us. You know, I happen to think that they were pretty clear, and yet, the market is telling us otherwise. They are still looking for signs
that this is not to use words that he had used months ago, "data dependent."
What do you think at this point in time?
RANDALL KROSZNER, FORMER U.S. FEDERAL RESERVE GOVERNOR: So, I very much agree. I think Jay was pretty clear that they are now going to start
thinking about the possibility of pulling back because we've had strong inflation prints, but they're not worried about inflation getting out of
control. And so, they are not ready to move too rapidly.
When they put up their statement, they also put up the infamous dot plots, where each of the members of the Fed decision making committee puts their
forecast out when the first rate increase is going to be. And I sometimes call those the renegade dots, because there really shouldn't be one big dot
for Jay, because he is really the key decision maker, and then the renegades all kind of have different views here and there.
And I think listening to Jay means that it's unlikely that you're going to have a rate increase before the end of 2022, even if some of the others
might think that there would be.
NEWTON: Yes. We made the case that Jim Bullard is a nonvoting member and he is only one person, and yet, it is more of a hawkish view. Before I get
to things like interest rates and the yield curve, I do want to talk to you about commodities.
It is interesting because the commodities this week, which were so hot, just three days ago, we now see them pulling back a bit. What does that
tell you?
KROSZNER: You saw some of them come back a little bit earlier, like lumber, for example, had -- you know, had this incredible rocket rise and
then a very rapid fall. I think people are realizing that, yes, there are supply bottlenecks. Yes, there is a lot of demand right now, but I think
some people were like hoarding some of these things or storing them because they thought things would even go up -- prices go even higher.
They're realizing that it's going to be strong demand, but not astonishingly strong demand. So, I think you're seeing a little bit of
pullback in those because there have been, I think, a bit of froth in some of those markets.
NEWTON: Yes, it's really been rubbernecking all week. You know, you had people talking about super cycles. And all of a sudden, by Wednesday and
Thursday, as you said, it was a bit of a pullback. What you tend to dampen -- I know -- what you tend to dampen, of course, these crazy inflation
expectations that we have had.
I want do want to get, though, to this debate between monetary policy and fiscal policy. We may or may not have a deal in Congress on infrastructure.
You know, we just talked on this show about the fact that Japan is not pulling back. Certainly, the E.U. isn't pulling back in terms of fiscal
measures.
At this point in time, how much do you think the Fed is worried about that mix between monetary policy and fiscal policy?
KROSZNER: Well, certainly they look very carefully what fiscal policy is doing because we've had a very strong fiscal boost in the U.S., $3 trillion
when the crisis first hit, another trillion last December, $2 trillion a couple months ago. And now fortunately, and I even saw a report that
someone was pushing $6 trillion on the table.
That's a lot of money. That's like 50 percent of GDP.
[09:35:01]
KROSZNER: And so the Fed worries that it could be a little -- a little too much all at once because they are giving extraordinary support to, in terms
of monetary policy, and if you have a lot of fiscal policy on top of that, plus pent up demand, savings rates have been high in the U.S. People have
been able to go out and spend, and people really want to go out and spend now that we've had a successful rollout of the vaccine and the success of
the vaccine.
So, I think they are a little bit worried about things going a little bit too much a little bit too fast, but they still don't -- they still think
they have inflation under control, or at least certainly, Jay does.
NEWTON: Yes. And it is interesting what you say is that -- listen to what the Fed Chair says, when it comes to dot plots or what he is saying. And he
is saying it will be data dependent. They continue to watch inflation. When we saw at least earlier, I don't even know what's going on with the yield
curve right now, but we did see a bit of a flattening.
Does that tell you that this whole concept of inflation, perhaps being transitory, being temporary, that that is still what the Fed believes. They
believe that, look, it may look a certain way now, but we can be in a completely different picture in six months.
KROSZNER: I think that's exactly right. I think the Fed really believes what they're saying is that it will be transitory. And I think they think
that it's more likely that it will be transitory if they can get people to believe them, because inflation expectations play such an important role.
Now, whether people go in and ask for increases in wages have a lot to do with where they expect prices to be, and whether firms are willing to give
them wage increases has a lot to do with whether they expect they can charge higher prices.
So, it's very much about the set of inflation expectations that are there. The Fed, I think, has been pretty good so far in keeping those tamped down.
But there's a risk, they could move up a lot.
You know, people haven't seen prices move up like this in decades. And so, they could start to question the Fed's credibility. I don't think they've
done that yet, but it's a risk.
NEWTON: Yes, I am old enough to remember inflation. And there is -- it's not an exaggeration to say there is a generation of people who do not
understand inflationary pressure in the market, and I think that's significant.
The other thing that I like to look at is the value of the U.S. dollar, and I do think sometimes that can put not just the Fed in a bind, but other
Central Bankers around the world that has strengthened for really the first time in months throughout this week.
How closely do you think the Fed watches the U.S. dollar?
KROSZNER: So, the Fed watches a whole bunch of -- a bunch of variables, and the dollar is certainly an important one of those. The key is that --
is the move enormous? You know, it's been a move, but I don't think it's an enormous move. And is it one that they understand what's driving it? And I
think they understand that with markets changing their expectations about when the Fed would make its first move, that would, if all the things meet,
will strengthen the dollar.
So, I think they're watching it, but it's not like they target a particular level for the dollar. As long as there's not a disorderly move, and they
understand why it is moving as it is, I think they're comfortable with the market setting the rates and the delay.
NEWTON: And I've only got about 20 seconds left, but how would you rate the Fed on communications this time around? It is definitely a different
school of thought with Jay Powell in the chair.
KROSZNER: I mean, it's always tough because they wanted to put the support out there last year, and I think it was exactly the right thing to do. And
at some point, they'd have to start pulling back, they have to start pulling back the punchbowl. That's always going to cause a lot of
volatility in the markets. But better to have some volatility now than an enormous amount down the line.
NEWTON: Great. Randall, thanks so much. I can think of no one better really to parse this with us. It has been a bit of a confusing week for
investors and business people alike. Thank you so much. Appreciate it.
Now, Lebanon was once known as a country that somehow managed to just get by, no matter the crisis. But after pandemic, wars, a crumbling economy,
and so many other disasters, the problems are now piling up, and that now includes a gas and electricity shortage that as Ben Wedeman reports has
literally sapped people of energy.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): As if Lebanon didn't have enough problems already, along comes another, a petrol
shortage.
UNIDENTIFIED FEMALE: Suddenly the whole country is, you know, is destroyed within a couple of months and it's just too much to bear.
WEDEMAN (voice over): Lebanon's currency has lost 90 percent of its value in less than two years. Inflation is soaring. A massive blast in the Beirut
port killed more than 200 people last year; coronavirus, killed thousands more, and the country hasn't been able to form a proper government in
almost a year.
Taken all together, it is grim.
UNIDENTIFIED MALE: We're going to hell.
WEDEMAN (on camera): These long lines outside the gas stations are a manifestation of a much bigger problem of a government that's bankrupt,
that's broke. It doesn't have enough hard currency to import fuel to keep the lights on.
WEDEMAN (voice over): Also in short supply, fuel to run the country's decrepit power plants. The normal lengthy power outages are getting even
longer. The electric grid is antiquated.
Those who can afford it depend on private generators to make up for the difference.
RAYMOND GHAJAR, LEBANON'S CARETAKER ENERGY MINISTER: It's getting tougher.
WEDEMAN (voice over): Lebanon's caretaker Energy Minister, Raymond Ghajar warns as bad as things are now, worse may be yet to come.
GHAJAR: The blackout will be a true blackout, not public electricity blackout. It will be a complete darkness, and I think this is, you know,
it's a calamity. It's not a scenario that's livable.
WEDEMAN (voice over): Iraq has reportedly promised to provide cut rate fuel, but it hasn't arrived yet, and meanwhile, Lebanon's squabbling
politicians do nothing to fix the country's many problems.
MARC AYOUB, ISSAM FARES INSTITUTE, AMERICAN UNIVERSITY OF BEIRUT: So we are just buying time. We are kicking the can down the road without reforms,
without a complete solution for this area.
WEDEMAN (voice over): And Lebanon is running out of time, fuel, and it seems everything else.
Ben Wedeman, CNN, Beirut.
(END VIDEOTAPE)
NEWTON: Now, could a Lego inspired solution make EV battery charging as quick as filling your gas tank. That is take one out -- pardon me, we have
that coming up -- take one out. Just put the modular battery back in. We talk to the maker of modular batteries when we come back.
(COMMERCIAL BREAK)
[09:43:43]
NEWTON: So, a widespread adoption of electric vehicles will depend on making them more affordable and efficient. Now, one of the challenges is
making charging quicker for those batteries.
A San Francisco based startup called Ample has a solution, it is a LEGO- like battery swapping system. The Ample battery is designed to fit any EV, anyone, allowing you to swap in a fully charged battery in just minutes.
Now, Ample says all of this can happen in mobile stations placed almost anywhere with no construction needed. Now, the company has just struck a
partnership with the ENEOS, the largest oil company in Japan.
Khaled Hassounah is the CEO and cofounder of Ample, he joins me now live. Yes, this is quite a concept. It's a plug and play sort of deal. Explain to
us how this all works.
KHALED HASSOUNAH, CEO AND COFOUNDER, AMPLE: (AUDIO ISSUES).
NEWTON: Sorry, Khaled, I apologize -- I apologize. We actually can't hear you. Unfortunately, we are having trouble with your audio. We'll see if we
can reconnect to you.
[09:45:02]
NEWTON: In the meantime, we are going to take a check of the markets here, which have continued their selloff in recent moments. Now, the Dow dropping
almost 400 points as you can see there.
Now, we will go to the fact that Wall Street seems to be wasting no time in getting its employees back into the office. Christine Romans explains why.
(BEGIN VIDEOTAPE)
BRIAN MOYNIHAN, CEO, BANK OF AMERICA: As more people get vaccinated, we keep bringing more back.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT (voice over): At Bank of America, one of the top banks on Wall Street, employees are
already encouraged to get back to work in-person, and if they're not already at their desks this summer, the company's CEO says they'll be there
by the fall.
MOYNIHAN: The view is after Labor Day, our view is all the vaccinated teammates will be back and we'll be able to operate fairly normally and we
will then start to make provisions for the other teammates as we move through the fall.
ROMANS (voice over): Manhattan's financial industry is clearly in a rush to turn the page on this era of virtual work.
UNIDENTIFIED MALE: If you work in New York and you work in Wall Street, you're probably going back to work soon.
ROMANS (voice over): Goldman Sachs has already asked its employees to return to work this week.
At Morgan Stanley, where some New York employees are also back at their desks, the bank CEO, James Gorman said Monday, he'd be very disappointed if
people aren't back in their Broadway office by Labor Day.
JAMES GORMAN, CEO, MORGAN STANLEY: If you can go to a restaurant in New York City, you can come into the office, and we want you in the office.
ROMANS (voice over): JPMorgan Chase CEO, Jamie Dimon has long been pushing for a return to work last month saying exclusively working from home
doesn't work for young people and for those who want to hustle.
UNIDENTIFIED MALE: New York-centric Wall Street banks are ripping the Band-Aid off and requiring employees to go back to work. One, for
competitive reasons, because they want to win. And winning is sometimes seeing customers face-to-face.
Two would be, the culture. You create culture by having people around each other. There's creative combustion. There's spontaneous interactions.
There's mentorship.
And third, there's additional safety in having people, you know, face-to- face in meetings as opposed to relying too much on remote communications, especially in a world with more cyber risk.
ROMANS (voice over): The effects are New York's economy and morale could be vast. According to a March report from the state's comptroller, the
city's security industry last year employed 179,000 people.
MATT EGAN, CNN BUSINESS SENIOR WRITER: More so than almost any other industry. Wall Street is synonymous with New York City, and there is no
question that this back to work push by the leaders on Wall Street delivers a huge vote of confidence in New York, a city that at one point was the
epicenter of this pandemic.
ROMANS (voice over): But not everyone on Wall Street actually wants to go back to their desks.
EGAN: There's no doubt that there is a bit of a divide here. Managers do want their employees to get back. They're worried about the culture.
They're worried about not collaborating. But I'm told that lower level employees are not really in any rush to get back to the office right now.
KATE LISTER, PRESIDENT, GLOBAL WORKPLACE ANALYTICS: Banking and the financial institutions have a very command and control culture. And
historically, they have been the ones that have been slowest to adopt flexible workplace strategies. It may be about the culture they want to
create, but I just don't know if it's going to be possible going forward.
I honestly think they've got a rude awakening coming.
(END VIDEOTAPE)
NEWTON: And our thanks to Christine Romans for that package, and I assure you, this debate will continue and we will have much more of FIRST MOVE
when we come back.
(COMMERCIAL BREAK)
[09:50:37]
NEWTON: CEO and cofounder of Ample, and I'm hoping we can hear you as you were going to explain this whole concept of EV batteries that quick (AUDIO
GAP).
HASSOUNAH: It is very simple -- the idea is --
(COMMERCIAL BREAK)
HASSOUNAH: ... for different vehicles based on the space available, bigger, smaller batteries, but also makes our robotics a lot cheaper and
simpler and that's what allows us to deploy it on a couple of parking spots, no construction -- quick, cheap and easy, which means, we can scale
a lot faster.
NEWTON: You make it sound pretty quick and pretty easy. I'm sure the interchangeability, I know people looking at EV for the first time, wanting
to buy their first electric car are worried about this, how long does it take to charge? Where do you find the station?
You're saying this is going to be applicable across all the brands?
HASSOUNAH: Correct. So, I mean, we have to work with the automakers so that the car is offered with the Ample solution, which we're doing with
five of the largest automakers in the world. At this stage, we'll be introducing models as needed.
Initially, our focus on fleets, we want kind of to make a lot of cars move to electric quickly. So, we're focusing on companies that can move 10 to
100,000 cars to electric very rapidly. But once the infrastructure is there, anyone should be able to use it.
NEWTON: Yes, we're watching the video of how this works right now. How long does it take? And how much does it cost? I can tell you when I first
looked at the cost, I know it's fast charging, I get that and you have to pay for that. But it still seemed a little bit expensive.
HASSOUNAH: Well, so I think one thing we don't take into account when we think about charging is that it's not just the cost of electricity, it's
building the infrastructure. That's where the real cost is, building 350 kilowatts, which are half as fast, if not the third, costs $2 million for
six ports.
So, at some point we're going to make it back into the cost of charging. Most people are not able to plug in at home, or they have a garage and a
parking spot or can afford to use slower charging. So, in a way, if you add up all of the costs such as what's happening in Europe right now, when you
really get to fast charging, even not as fast as what we're offering, you have two to three times as expensive as gas.
And I have to say, fully delivered, getting to your car, what is the cost? If you can be cheaper than gas on day one, you can convince people to make
the transition to electric, and that is what we're aiming for.
NEWTON: Yes, I'll point out it's not that much cheaper than gasoline, especially when you think of hybrid vehicles who are running on both. I
know, a traditional internal combustion engine, but also the battery itself. I do want to talk about the sustainability of this. There's
thankfully been a lot more attention to the sustainability of batteries and what it actually costs. What is your concept of that? How is your company
addressing that matter?
HASSOUNAH: Well, so a couple of things. First, if you can make a battery go twice as far as many miles, then you've just doubled your sustainability
goals. So, that's kind of number one, it is that because we control how we charge these batteries, we can control how they are used, we're able to
actually to get a lot more life out of them.
But the second more important thing is that while they're being used in the transportation use case, instead of them being just deteriorating, we can
use them for grid support and that gives us kind of a double use of the battery allowing us to get more usage out of it. You compound on that the
fact that the moment it's easy to -- the moment you're done using it in the transportation use case, you can extract these batteries, plug them into a
wall and it immediately becomes static storage for second life and possibly third life.
So in a way, one of the major ways in which this has solved the sustainability challenge is by first making it very easy to get more use of
the battery, but then also make it a lot easier to recycle after it's done.
NEWTON: Yes, and I know that's a key thing. I don't have a lot of time left, but this is becoming a very crowded space. Why Ample? And how
strengthened do you think you are by your new partnership?
HASSOUNAH: Sure. We're looking at a world in which there is a billion cars plus that are electric. That's kind of what we're hoping to accomplish over
the next 20 to 30 years. That's not going to happen if the infrastructure you're deploying cannot become profitable in and of itself. Also, the use
case that's needed.
[09:55:10]
HASSOUNAH: So, our goal would be to be able to create infrastructure very, very rapidly and do it profitably almost day one. Anyway, that's why
ENEOS's partnership is relevant because that is their goal as well as an energy company is that they can't kind of depend on government subsidy
forever.
And in order for us to be able to deploy rapidly, we need partners who can help us accomplish that and ENEOS is one of those.
NEWTON: Well, we'll certainly continue to watch this development and as I said, keen awareness on the part of new adopters of this technology in
terms of where all of that recharging capacity in that battery capacity is going.
Thanks so much, really appreciate your time.
HASSOUNAH: Absolutely. Thank you.
NEWTON: Now, we are going to take one more look at the markets before we go and yes, it is unfortunate, but U.S. stocks are continuing their
selloff. It is actually picking up.
Blue chips seeing the biggest losses. Investors, of course, reacting to those new comments from St. Louis Fed President, James Bullard, who now
expects the Fed to begin raising rates really earlier. And we are talking of course of that great debate, whether or not inflation is temporary and
what rates will do in response.
I can assure you, it is going to be a very rocky day today on the markets.
Stay tuned to CNN.
Becky Anderson is next with "Connect the World."
(COMMERCIAL BREAK)
[10:00:00]
END
