Return to Transcripts main page
First Move with Julia Chatterley
Fed Chair to Speak Amid Inflation, Recession Fears; Historic Heat Wave Dries up China's Use of Coal; Investors Await Fed Chair's Speech at Jackson Hole; Climate Change, War in Ukraine Aggravate Foot Shortages; World's Largest 4-day Week Trial Underway; U.S. Stocks Mostly Lower Ahead of Fed Chair's Policy Speech. Aired 9-10a ET
Aired August 26, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
ALISON KOSIK, CNN HOST, FIRST MOVE: A warm welcome to "First Move", I'm Alison Kosik. Great to have you with us this Friday and we are waiting on a
major development in the U.S. government's classified document probe against former President Donald Trump.
The U.S. Justice Department has until noon Eastern Time today that's 3 hours from now, to unseal parts of the affidavit used to justify its raid
on Trump's Mar-a-Lago home, the raid that removed a substantial number of highly sensitive documents from the residence. And we're going to be live
in Washington with the latest.
A waiting game underway on global markets to Fed Chair Jerome Powell is set to deliver his highly anticipated speech in Jackson Hole Wyoming. That
happens one hour from now, the speech could offer new insight into the U.S. Central Bank's policy, its path as it battles high inflation.
A new read on the Feds preferred measure of inflation, the core rate of the PCE that's the price index, PCE price index that has just been released,
and it is a bit more encouraging. Core PCE rising by a weaker than expected year over year rate of 4.6 percent last month. That's down from June's
levels the latest U.S. personal spending numbers coming in weaker than expected too.
U.S. futures improving a bit after today's data but we remain on track for a mostly lower open as we wait on the Fed Chair's speech, a bit of
nervousness in Europe as well.
New numbers out of Germany today showing consumer sentiment at record lows as electricity prices they're hit fresh record highs. I want to bring in
Rahel Solomon, she joins us live now.
OK, so all eyes on Chairman Powell this morning. And it was exactly a year ago that he suggested inflation would be transitory. He is now, appears to
have been wrong about that. So something tells me he's going to have to watch his words more than he did last year. And you know, today will be
more about tone, right?
RAHEL SOLOMON, CNN CORRESPONDENT: Yes, I think that's a great point, Alison, because Chairman Powell is always very careful about his messaging,
perhaps even more so this year, because of how famous transitory became. And of course, we all know that transitory was now not the case. So I think
it's going to be a little bit of walking down memory lane thinking about the year that was, and also preparing us, at least from his point of view
from the Fed's point of view of the year ahead in terms of inflation. In fact, let's take a listen to his comments last year, when delivering at
Jackson Hole. It was virtual last year. But let's take a listen to some of his comments.
(BEGIN VIDEO CLIP)
JEROME POWELL, CHAIR, U.S. FEDERAL RESERVE: The spike in inflation is so far largely the product of a relatively narrow group of goods and services
that have been directly affected by the pandemic, and the reopening of the economy. And from long experience, we expect the inflation effects of these
increases to be transitory.
(END VIDEO CLIP)
SOLOMON: So let's talk Alison about what has happened since then right? I mean, back then, Powell thought it was narrow, it has since broadened in
terms of inflation, Powell, we didn't hear him say it there. But in reading his speech, he talked about supply chain starting to improve; we know that
that's been a very slow process. So we still have supply chain issues. We expect him to continue to talk about that today. And he talked about the
impact to energy prices and that energy prices had accelerated as part of the recovery, but that he had hoped and had expected that those prices
would moderate. Obviously, Russia's invasion of Ukraine really, you know, exacerbated energy prices, although they have since recovered.
So it has been an eventful year to say the least. Looking ahead, what do people want to hear? Well, it depends on who you are? I mean, some want to
hear a really aggressive hawkish fed in terms of raising interest rates to tame inflation on the front end. Some want to hear we're going to do as
much as we have to, but not too much. And so there are sort of all sorts of opinions and views about what he should say. Regardless, we're all going to
be watching very closely in about 57 minutes to every single word, trying to get a sense of what the path ahead looks like.
KOSIK: Yes, and along with listening to every word comes the translation of what he's saying, you know, he has made it clear that his decision on
interest rate hikes comes with what the data says. And today we got that new piece of inflation data. What's the likelihood he'll at least refer to
that piece? The PCE inflation report, I'm talking about that he'll refer to it maybe today.
SOLOMON: I think there's a good chance I'll refer to it. I think what we saw in today's report, we saw in some of the prior inflation reports in
terms of the CPI report in the PPI report, which is that energy is having an impact on headline inflation. However, core inflation moderating, at
least in this report, but not nearly as much as what the Fed wants to see. They have been very clear about what they're looking for, as evidence clear
compelling evidence of inflation declining.
[09:05:00]
SOLOMON: That is core inflation declining month over month. And Alison, we have not seen that yet. Certainly moving in the right direction in terms of
moderating those increases, certainly moderating, but we haven't seen declines month over month in terms of core inflation. And they've been very
clear that's what they're looking for. So I definitely think to your point, we'll hear the impact that energy is having on top line inflation, and
certainly how that impacts sentiment and how that impacts inflation expectations. But I think in terms of are we really making meaningful
progress in terms of their goal of getting us back to 2 percent? I don't think we're there yet.
KOSIK: All right, Rahel Solomon thanks so much for your reporting. Now to the latest on the war in Ukraine, the country's largest nuclear plant
reconnected to the national power grid, lessening the risk of an imminent nuclear disaster. The plant in Zaporizhzhia, which is held by Russian
forces, had been disconnected from the grid on Thursday. David McKenzie is live for us in Lviv. You know, David, I saw this statement from Ukraine's
energy minister saying Russia's forces there are a constant trigger of a possible nuclear disaster. I mean, how volatile of a situation is it?
DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Alison, it's a very volatile situation. But there is this little bit of relief, I think in
terms of the immediate fears of a very bad situation such as some kind of leak or even a meltdown. Because you had that scenario playing out when
both sides accusing each other of causing a situation that they removed that from the power source.
Now that is important, because you need to constantly cool those fuel rods in reactors, even if they are not operational there was a moment it's
unclear exactly how long were one of those reactors was disconnected from the power coming in. According to the authorities in Ukraine and the
president, the workers there have been working under extremely challenging conditions managed to put in those diesel backup systems very quickly.
That averted the potential disaster, they say. And now it seems like at least one reactor is reconnected with the Ukrainian power grid to allow it
far less than it would be before the war but allowed to produce some electricity for the Ukrainian grid.
KOSIK: David, what's the progress of the IAEA visit?
MCKENZIE: I think this is the next thing that everyone's really hoping for because over the last few weeks, we've been reporting on this. Every day
goes by with some potential calamity and accusation from one side to the other of shelling on the site fires being started. You know, we spoke to a
worker and an administrative worker at that site who said they are working in hellish conditions, the shelling going on back and forth across the
Dnipro River.
And so what really is needed, say international act is for that IAEA inspectors to get in there. President Zelenskyy will try to calm Ukrainians
in his address and also apply pressure on the agency.
KOSIK: All right, David.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE: I want to assure all Ukrainians we're doing everything to prevent emergency, scenarios. But it depends not
only on our state, international pressure is needed that will force the occupiers to immediately withdraw from the territory of theirs after
reaching a nuclear power plant. The IAEA and other international organizations must act much faster than now because every minute of the
Russian military staying out of the nuclear plant is a risk of global radiation disaster.
(END VIDEO CLIP)
MCKENZIE: And so the head of the IAEA has said that it could be days he didn't specify how many days or what exactly needed to be figured out.
Before they get in there. He said that some progress has been made, but it's still very tricky negotiation with two warring parties to get the team
in there to actually ensure that this nuclear power plant is safe, Alison.
KOSIK: OK, David McKenzie, thanks very much. A winter of discontent lies ahead for millions of Britons facing soaring energy bills. The U.K. energy
regulator has just announced the price cap on household energy tariffs will rise by 80 percent.
Gas prices on the global markets were already raising post pandemic. And Russia's war on Ukraine has driven them into the stratosphere. Let's bring
in Scott McLean. He joins us now from London. You know, this really means that households Scott, the U.S. and the U.K. rather, are going to be paying
almost triple the price to heat their homes compared to a year ago.
SCOTT MCLEAN, CNN CORRESPONDENT: It's pretty wild, Alison, and look, it's obviously not unique to this country. This is certainly a problem right
across Europe as gas as energy prices continue to rise. Now I should point out that here in the U.K., the energy price cap, it's not a maximum that
you could possibly pay for gas and electricity and if you go past it, then it's free. That's not the case.
[09:10:00]
MCLEAN: It's just a maximum that the companies can charge over and above the actual wholesale cost and there are other costs. So it's a cap on the
profits that they can actually make. And it's expressed as the maximum that a typical household with typical usage would actually pay.
So it comes into effect in October and the energy companies are already warning that, or the energy regulator, I should say, is already warning
that in 3 months, when this number is updated, that it's very likely to get even worse than it is right now.
So I spent the afternoon with a calculator in my hand trying to get a sense of what this would actually cost the average family in the U.K. And what I
came up with is pretty striking. So the median household income after tax in the U.K. amounts to just over $3,000, the rent on average is more than
900, food more than 350. I think we have this graphic that we can put up now.
And then the list goes on with transportation, T.V., phone, internet, water, clothing, and then energy under this new price cap would cost about
$350 per month. If you add all that up and subtract it to what you actually make, you're left with only about $900.
And Alison, what I did not include in this list is anything fun, recreation, meals, vacations going out to a restaurant to eat, drinking,
smoking, if you happen to have those vices. Official data suggests that those would cost about the average person average household about $400 per
month.
So there's not a whole heck of a lot left over. If you look at the richest households, they're not going to feel it all that much. But if you look at
the poorest households, you make about half of that 3000 number that I mentioned there.
They're already feeling it even before these energy prices started to spike. And so this, their energy bills, if they're typical users could be
about a quarter of their after tax income - pretty remarkable, you mentioned some of the reasons that the regulator has given for these rises
that the economy seemed to rebound quicker after COVID than people expected. Obviously, the war in Ukraine has got Russian gas shipments to
the continent to Europe down 77 percent. And the head of the regulator tried to put this into context for people, listen.
(BEGIN VIDEO CLIP)
JONATHAN BREARLEY, CEO, OFGEM: And when I look at the prices in winter, they're already 15 times what they normally are. Now, if that were to
happen in petrol that would mean it would cost us 400 or 500 pounds just to fill up our car. So the cost of energy, are changing dramatically. That
unfortunately, we do need to reflect that cost. And that's why the price cap is changing today.
(END VIDEO CLIP)
MCLEAN: So for 500 pounds, about 5 or 600 U.S. dollars to fill up your car again with his analogy. I also want to point out one other thing else and
that is the new research from an energy research companies just that while Europe is really suffering with the heavy cost of energy, Russia is burning
it, flaring it actually at one LNG plant that they have near the finish border. And this research that's based on satellite heat imaging suggests
that they're burning about $10 million every single day all the while Europe cannot seem to find enough natural gas to keep prices in check. Now
according to the researchers, the reasons for this flaring, they could be relatively benign. They also point out that they could very well be
political as well.
KOSIK: Yes, Russia is doing away with all the energy and Britons right now are reconfiguring their budgets I can hear it now. Scott McLean thanks so
much.
In China, a record breaking heat wave driving up consumption of coal. Severe drought has sharply reduced the output of hydro-electric power.
Normally, it's the second most important energy source. Kristie Lu Stout has the details.
(BEGIN VIDEOTPAE)
KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): The challenge is immense. A record breaking heat wave has been scorching China since June, drying up
riverbeds threatening crops and livestock, triggering wildfires and shutting down factories and it could also jeopardize China's carbon
commitments.
China is the world's biggest carbon emitter. And earlier this year, Chinese President Xi Jinping pledged to strictly control coal fired power projects
and limit the increase in coal consumption. The goal to strive to reach peak Co2 emissions by 2030 and carbon neutrality by 2060 but while China
has also been racing ahead and the acquisition of renewable energy sources like solar and hydropower, it is still beefing up its coal power production
to keep up with demand, and the extreme heat has clipped some of the momentum.
Across Sichuan Province, found 84 million people drought has cut its hydropower capacity by half. So 80 percent of the provinces electricity
comes from hydropower. To make up the shortfall Sichuan has been running its largest coal fired plant non-stop and temporarily closing factories to
save power. So will the energy fallout from the heat wave make it harder for China to decarbonize?
[09:15:00]
MARK BEESON, ADJUNCT PROFESSOR, UNIVERSITY OF TECHNOLOGY, SYDNEY: I think there's good evidence, that's true and members of the Politburo have
actually been advocating this and saying that they have to go back to coal because it's more reliable. So the chances of them doubling down on the
supply of coal fired power stations are going to be increasingly higher think in the future.
STOUT (voice over): China's top scientists have warned that the country is particularly vulnerable to climate change, with its temperatures rising
faster than the global average. According to the Yuan Jia-Shuang, "In the future, the increase in regional average temperatures in China will be
significantly higher than the world."China feels the devastating effects of climate change, plans for international cooperation to tackle the threat
have been appended.
In response to U.S. House Speaker Nancy Pelosi's controversial trip to Taiwan, China cut off climate talks with the US.
NICHOLAS BURNS, U.S. AMBASSADOR TO CHINA: China represents 27 percent of all global emissions the United States 11 percent were the 2 largest carbon
emitters. It's vital for the rest of the world that the United States and China continue to talk on climate change.
BEESON: In the long term, unless we find ways of cooperating internationally. No country on earth, not even the most powerful and most
populous country on Earth can solve this problem on their own.
STOUT (voice over): Kristie Lu stout, CNN, Hong Kong.
(END VIDEOTAPE)
KOSIK: And these are the stories making headlines around the world. The U.S. Justice Department could release the affidavit used to justify the FBI
search of Donald Trump's Mar-a-Lago home at any time. The department has until noon Eastern today. The Affidavit lays out why investigators believe
there was probable cause that crimes had been committed.
CNN's Senior U.S. Justice Correspondent Evan Perez joins us live now. So we are waiting on the release of this affidavit once it comes out. What
happens then?
EVAN PEREZ, CNN SENIOR U.S. JUSTICE CORRESPONDENT: Well, we almost never see affidavits like this at this point in an investigation. We, obviously
until there are charges. And we don't know whether there will ever get to that point in this investigation.
We don't typically see these. So what we want to see from this is, you know, the parts of this investigation, all of the things that they have
been working on, that gave them reason to believe that there was additional classified information at the former President's home in Palm Beach. And
that caused the FBI to carry out this extraordinary search and seizure just over two weeks ago.
The judge in this case said that he is releasing this because he believes that the government has narrowly tailored its redactions to protect the
integrity of this investigation. And he was leaning towards letting the public see as much as possible because of the extraordinary nature of this
search at the former President's home.
But what we're looking for is, again, what are the things that led the FBI to believe that despite the representations from the former President,
there was still additional classified information, even though they had been working on this.
The National Archives had been trying to retrieve these documents since May of 2021. And certainly after they got these initial boxes earlier this
year, they became alarmed that there was highly sensitive, classified information being stored in an unsecure manner at this house. It has beach
house in Palm Beach.
KOSIK: All right, CNN's Evan Perez in Washington thanks.
PEREZ: Thanks.
KOSIK: Coming up on "First Move" struggling to feed Somalia a malnutrition crisis has gripped the nation. We'll hear from Mercy Corps about what it's
doing to help. How about an extra day off every week on full pay? Yes, I'll take it; - we all hear how this new deal for workers is going so far?
(COMMERCIAL BREAK)
[09:20:00]
KOSIK: Welcome back, I'm Alison Kosik. For global investors, the waiting is the hardest part. U.S. Federal Reserve Chairman Jerome Powell is set to
deliver a closely watched policy address at the bank's Jackson Hole symposium. That's about less than a half an hour from now. U.S. futures are
strengthening over the past few minutes as we wait on Powell's speech. Thanks to some market friendly economic data.
The PCE Price Index, that's the Feds preferred measure of inflation that rose at a weaker than expected year over year rate of 4.6 percent in July.
New numbers show consumer spending that's cooling off a bit too.
The Fed also gets a new read on the U.S. jobs market next week. All this consumer inflation numbers those come out before the next FOMC meeting as
well. Let's bring in Jeffrey Kleintop. He is the managing director and chief global investment strategist at Charles Schwab. Great to have you on
the show.
JEFFREY KLEINTOP, MANAGING DIRECTOR, CHARLES SCHWAB: Thanks for having me, great to be with you.
KOSIK: So we are seeing that inflation at least prices. They cooled off a bit in July. What does that mean for what the Fed is going to do in
September when it hikes interest rates? Could we see a less aggressive stance and maybe a half a percent? Are you seeing a three quarters of a
percent move or even maybe a quarter of a percent?
KLEINTOP: It probably makes a half a percent move more likely after a series of 75 basis point rate hikes that preceded it. You know, the markets
have been bracing for a message from Powell about the need for more rate hikes.
But just as it was true a year ago, Jackson Hole is this coming data that did you just referenced in the data we're going to be getting ahead of that
September meeting. That probably matters more than the speech itself when it comes to the Feds future policy moves, a year ago showed that data on
inflation and demand was accelerating. But now it's showing the opposite.
You mentioned the data this morning on the PCE deflator coming in below zero and surprising on the downside, we may see this similar type of thing
for the University of Michigan data, which is very important to the Fed later today. I think that's relatively important. The Fed isn't done
hiking, but may offer a little bit of a caveat to that the subject of the Feds conference is constraints on policy, the Fed can't make more natural
gas, it can only limit demand for it and as you noted with the data that's already happening.
KOSIK: Constraints on policy that includes the supply chain as well, which is contributing to inflation. You know, I think it's less about or correct
me if I'm wrong, it's less about what Jay Powell says and more about his tone. What do you think Investors want to kind of glean from that tone
today?
KLEINTOP: Well, I think they want to get a sense of you know, how is the Fed looking at the data that will be coming in? Are they very much in the
position of saying we're going to lag the data, meaning they're going to wait till they see a lot of months in a row of declining inflation before
they begin to declare victory? Or are they going to show a little bit more?
They're going to be looking for the tone from Powell and some of the details in there of what are the Fed looking for how much a weakness in the
labor market? Are they willing to tolerate or accept before they before they begin to halt rate hikes? What are they looking for in terms of
overall demand or consumer sales as we go into the important holiday season here, and what are they expecting to see on the inflation front? I think
all of that the tone of the Fed's reaction function to the data is as important to as the data itself.
KOSIK: Do you think inflation has peaked? And do you see the Fed overcorrecting because this data obviously is behind us?
[09:25:00]
KOSIK: And you know don't have a crystal ball neither does the Fed unfortunately.
KLEINTOP: Right, I do think barring unforeseen developments, which can always occur, we probably have seen the peak in inflation, all prices don't
peak at one time. Usually there's a process commodity prices tend to peak first. And we've seen that oils down $25. Wheat has come all the way back
down, which was a big deal after the Russian invasion of Ukraine. We've seen aluminum prices really come down. So a lot of key commodities have
come down for a few months now. Goods prices usually come next. And we're starting to see that we've heard from Walmart, Nike, Macy's, Kohl's, target
so many retailers that they're overburdened with inventory, and they're cutting prices going into the shopping season. And then come services,
services make up most of inflation. 57 percent of the CPI is things like housing and health care and education. Those prices haven't come down and
they're not showing any signs of rolling over anytime soon.
So it's a struggle between some of the leading indicators of inflation and the lagging indicators of inflation. So I think we've seen the peak, but
the pace at which it falls still very dependent on very stubborn rent and housing prices.
KOSIK: Yes, and with the Fed, no stopping them now with raising rates. Do you think the stock market isn't pricing in just how aggressive the Fed may
get? I mean, you look at the S&P 500 it's, 15 percent for off the June lows.
KLEINTOP: It has moved a lot over the last couple of weeks. We've seen I guess we're down a little bit this week down a little bit last week. I
think the market is trying to reassess the pace at which this is happening. But look, the market is affected by global monetary policy and even though
the Fed certainly got some rate hikes ahead of it here.
We you know, there's a lot of trees in Jackson Hole, Wyoming but we don't want to miss the forest. You know, what we've heard from other central
bankers, many of which will be attending Jackson Hole is that maybe they're at the peak of their rate hikes. The Central Bank of Brazil and the Czech
Republic National Bank, not too we talked about very often, but they lead the wave of global central banks and hiking rates last year.
They had no signal as of August 3; they both said they were done. We also got the Bank of Korea this morning, only hiking base 25 basis points after
hiking by 50 in July. So we're seeing a slower pace and maybe even beginning of the end of rate hikes around the world. And that means global
monetary policy might be beginning to not easy yet but really slowed down dramatically in terms of its pace of tightening even if the Fed has a
little bit more to go.
Given how the Fed lagged the rest of the world in hiking rates might still be several weeks away, or months away from stopping. But it is noteworthy
since stocks tend to react to global monetary policy, not just from the Fed.
KOSIK: All right, Jeffrey Kleintop, Managing Director and Chief Global Investment Strategist at Charles Schwab. Thanks so much for your expertise
today.
KLEINTOP: Thanks for having me.
KOSIK: Coming up after the break, Russia's war and climate change are having drastic impacts on the Horn of Africa. I'll be talking with Mercy
Corps CEO about what needs to be done to help save lives that are next.
(COMMERCIAL BREAK)
[09:30:00]
KOSIK: Welcome back to "First Move". I'm Alison Kosik. This week, the Head of the UN said over 720,000 tons of grain and other goods have been shipped
out of Ukraine since the Black Sea initiative was signed in July.
That gives at least some hope to vulnerable communities in Africa and the Middle East that rely heavily on Ukrainian and Russian exports. A prime
example is Somalia where a hunger crisis is being deepened by extreme weather and Russia's war.
The humanitarian group at Mercy Corps said while the grain deal will ease some shortages, more work needs to be done. Joining me now is Tjada D'Oyen
McKenna. She is the CEO of Mercy Corps. Welcome to the show.
TJADA D'OYEN MCKENNA, CEO, MERCY CORPS: Thank you for having me.
KOSIK: And I'm so grateful you took time out to talk with us. I know you just returned from Somalia, just a day or so ago, you visited the affected
communities there. Talk us through what you saw, what did you learn?
MCKENNA: Somalia is in its fourth season of no rains. So since early 2021 people in rural communities who depend on livestock and agriculture have
been left with animals dying because of no rain and no water, and no crops that have been grown.
And so they've lacked any economic ability to make an income or to have food. And already to date over 1 million Somalis who have lost everything
have left their homes and rural communities and are going to these camps on the outskirts of major cities.
And by the time these migrants arrive, they are already suffering from severe malnutrition. They've lost everything. So I met people who walked up
to 14 days to get to locations and the numbers are just immense.
I met in a short period of time there I met two women who lost, whose children died on the way to these camps and had to be buried on the side of
the road. And the cases of severe malnutrition have just skyrocketed. I visited a hospital and I saw multiple children who were two years old, who
weighed less than seven kilograms.
KOSIK: Do you tell--
MCKENNA: This is a devastating, devastating crisis.
KOSIK: I was just going to say you tell such devastating stories. I mean, really heartbreaking here, the drought crisis is across the entire Horn of
Africa region and the severe hunger, as you say, is affecting 10s of millions of people.
Explain to us why this is just getting worse and worse. Obviously, climate change is a huge reason. And why is this so overlooked by the world?
MCKENNA: Yes, that the climate changes that we're going to keep getting these severe jobs, and they're going to come closer together and be more
severe. And this was already a problem before the war in Ukraine started.
But since then, we've seen because the Ukraine was a food basket, we've seen prices of basic supplies just skyrocket. So food prices have gone up,
fuel prices in Somalia are up 40 percent. Flower prices are up over 100 percent.
So people who are already economically vulnerable and suffering. Now, it's just much more expensive for them to be able to survive. On top of that you
have the supply chain crises that we were already facing because of COVID.
And we're dealing with populations that may have already been depleted by COVID in terms of excess capacity or other sources of resilience. So a lot
of things are combining to make this a particularly devastating time.
KOSIK: Yes. And can you tell us how much grain has gotten through with the deal to allow exports through to the Black Sea? Are you able to tell if any
of that grain has reached Somalia which you've already made clear is just not enough, but how much has gotten through?
[09:35:00]
MCKENNA: It's just not enough. And I don't think it's any of it has hit Somalia yet, I think it is expected to land in Africa. But the reality is
the grain that is making its way out of Somalia is already much less than the grain that the market would have normally expected out of the Ukraine.
Because farmers were displaced and had to move, things sat in storage for a long time. So we're seeing less supply than the world was already used to
from Ukraine. And it's coming and those are still coming through market means.
So we're glad to see some of these grains coming to places that need it the most. But it's not enough, it won't be enough. And it's too late. And the
other part of this is that if there are farmers in Ukraine are being disrupted from planting now, we will see a few years of decreased grand
supply.
KOSIK: What has to happen to actually get the world's attention?
MCKENNA: I thank you for bringing attention to this. I think there's a fatigue, people are focused on Ukraine, they're focusing on all kinds of
things. But one thing I hope that people and governments and other donors will realize is just like COVID, and everything else, the situation in the
world right now does not affect all of us equally.
And there are millions of children and very vulnerable people who lived in more difficult circumstances, who are suffering even more in a
disproportionate amount. The really tragic part of all of this is that climate change is going to affect Somalia the most and it's affecting the
Horn of Africa the most.
And Africa as a continent has been the smallest contributor to climate change. And so it's not just a human, there's human dignity, but also
people have to survive and not dealing with this gives room for other extremist groups to take over.
You know if governments if we don't step in to help, someone else will and we need to be cognizant of the long term impacts of this.
KOSIK: Well, thank you so much for coming on the show today. Tjada D'Oyen McKenna with Mercy Corps, we appreciate it.
MCKENNA: Thank you.
KOSIK: Stay with "First Move". We'll have more after this.
(COMMERCIAL BREAK)
[09:40:00]
KOSIK: California is to ban the sale of new cars with gasoline engines from 2035. State regulators approved the measure Thursday; California's
emissions standards have the ability to shape the global market.
The big U.S. brands are already on board. GM has said it will only sell EVs by 2035. Ford and Stellantis, the parent of Chrysler are targeting 50
percent by 2030. Daniel Sperling, who is on the California Air Resources Board voted for the ban. Speaking ahead of the vote, he told Richard Quest,
similar moves are coming from outside of the U.S.
(BEGIN VIDEOTAPE)
DANIEL SPERLING, BOARD MEMBER, CALIFORNIA AIR RESOURCES BOARD: Europe, of course, is moving ahead very aggressively as well. And they're planning on
adopting a very similar mandate for 100 percent by 2035. And they're planning I do that later this calendar year. So there's, you know--
RICHARD QUEST, CNN BUSINESS CORRESPONDENT: Existing cars, existing cars will be allowed, obviously, to stay on the road. Is this is not an idea to
get rid of existing cars, but they'll obviously be phased out and as the hybridization of the vehicles over time. And were you encouraged by the
fact that the car companies didn't fight this?
SPERLING: It was very interesting. In fact, they already testified this morning, just a couple hours ago. And they said, we support it, they said,
we are concerned that we want to see investment in infrastructure; we want to make sure there's incentives for buyers.
But they said we're on board, and we're going to do it. And that was for the entire industry. So I have to say I was surprised. I was surprised.
We've had some, we've had some pretty bitter battles in the past, and lawsuits and so on. But it's not happening this time.
QUEST: So related to that and there has been obviously we had the Biden infrastructure plan, which went through with hundreds of billions, nearly
trillions. And we had this latest inflation reduction, is there enough money being put into infrastructure for this change?
SPERLING: I think so, there's going to be need more. But it's getting started, you have to remember the first few for until you get to about 40,
50 percent of the market of the sales, you really don't need a lot of public charging.
And that's because that those people, they're the people that are more affluent, they have single family homes, they charge at home. And so it
doesn't really become critical until you get to the point where now you're touching people's second car, or you're getting into people living in
apartment buildings, condominiums and we're not there yet.
So it's not critical for the next three, four or five years. But after that, it will be critical to get that charging infrastructure in there.
And, you know, sometimes those utilities are slow and permitting is slow. So it is something to worry about.
(END VIDEOTAPE)
KOSIK: For millions of U.S., from millions of us rather the drudgery of working from nine to five or five days a week has been the way work must be
done. And it's taken a seismic shift like the pandemic to reveal it doesn't always have to be this way.
Thousands of workers are halfway into a six month study into a four day working week. The deal is you get the same pay in return for the same
productivity. Nearly 10,000 employees from over 180 companies are trying it out, ranging from financial services to a fish and chip shop. New Zealand
entrepreneur Andrew Barnes first came up with the idea.
(BEGIN VIDEO CLIP)
ANDREW BARNES, FOUNDER, PERPETUAL GUARDIAN: The way that we work today isn't fit for purpose. It owes more to the 19th century than the 21st;
working four days a week radically changes lives. Working longer isn't about working smarter, or harder.
We found the four day we can power our staff to make decisions, but also gave them a collective ownership of the future of work.
(END VIDEO CLIP)
KOSIK: Charlotte Lockhart is the Founder and Managing Director of 4 Day Week Global, a not for profit Think Tank running the trial. Well, I can't
wait to dig into this. Welcome to the show.
CHARLOTTE LOCKHART, FOUNDER & MANAGING DIRECTOR, 4 DAY WEEK GLOBAL: Thank you.
KOSIK: OK, so three months into this program, what our employees and what our employers telling you about it?
LOCKHART: Well, so interestingly, they are sort of midway in formal survey with the team on the UK pilot, which is where we're at with the Midway.
They're all very encouraging signs most of them are reporting that their productivity is at the very least the same, but a large number of them are
reporting increased productivity.
[09:45:00]
LOCKHART: They're all feeling very enthusiastic about, you know, developing the program and working out how is within their organization, they can
reduce wait time.
KOSIK: OK, so how are you measuring this productivity?
LOCKHART: Well, interestingly, most businesses measures things in some sort of productivity in some sort of way. And so what we do with the companies,
when they come on one of our pilots is that they look at what they're already measuring, because they'll have historical data for that.
And then what else could they perhaps increase their measurements to so and we encourage them to ask their staff to help them, you know, decide what
those things will be.
KOSIK: So help us understand this if they're working 80 percent of the week, but they're giving you 100 percent productivity, does this mean
they're working really long days during those four days?
LOCKHART: No. So we have a principle called the 180, 100 rule, where you have been paid 100 percent for 80 percent time with 100 percent
productivity. But what that means is that your staff will look at how they use their time, and the way that they work collaboratively, possibly the
way that they use technology.
And you know, you can add and fixable and remote as far as that sort of thing is concerned as well. And they'll actually find those efficiencies
for themselves and for you, when they are given the true benefit of being able to have more turn off. KOSIK: OK, there are plenty of critics with
this idea, a couple of CEOs on remote working telling you what they're saying, well, one of them saying if you want a job, stay remote all the
time. This is Rich Handler of CEO of the Investment Banking Company Jefferies.
If you want a career, engage with the rest of us in the office. From JP Morgan's Jamie Dimon, he argued that remote work doesn't work for people
who want to hustle. He said it doesn't work for culture; it doesn't work for idea generation.
So the question I have for you is remote work where careers go to die?
LOCKHART: Look, potentially is in some industries. And we're not necessarily advocating for remote work at all. What we advocate for is
engaging with your people to find the way in which work can be reframed to include perhaps flexible and remote, but also reduced.
So therefore, what you're looking for are all of those benefits, but still focusing in on those things that we also need, which is the team engagement
and the collaboration and, and the way that we might all work together. So remote is a conundrum I think we're all facing.
KOSIK: A quick question about that conundrum. Why do you think it is U.S. employers seem to mostly be pushing back on this idea?
LOCKHART: Oh, look, it's not just U.S. employers. But yes, there are lots of U.S. employers that are doing that. And I think that there is, it comes
down to the way that we in our heads frame what work looks like.
So I often say to business leaders, when I'm talking about this with them is that we need to remember that we borrow our people from their lives. And
when we frame it like that, and then we have this whole hustle culture around, you know, we must be always on and we must be always working.
But my question to you was what work is? You know is it this thing that we grind to every day? Or are we going to work on our relationships, work on
our health work on our ability to up skill and, and educate ourselves, work on community engagement and doing things and have civic duties. So, so
actually, how are we using our time to make ourselves better people? Not just somebody else profits.
KOSIK: Oh, you don't have to convince me, I'm all for balance. Charlotte Lockhart, Founder and Managing Director of 4 Day Week Global. Thanks so
much.
LOCKHART: My pleasure.
KOSIK: Stay with "First Move". We'll have more after this.
(COMMERCIAL BREAK)
[09:50:00]
KOSIK: With pressures on the global food supply chain one airline appears to be taking the matter into its own hands. Emirates have opened its own
vertical farm, six years into the making the facility is producing leafy greens that will be served on the company's flights.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN CORRESPONDENT (voice over): Airplane food, some people love it, some people hate it. Either way, meals are a crucial part of any
long haul flights. And making sure all ingredients are at hand is a constant challenge for caterers.
KIERAN DOWD, VICE PRESIDENT OF SOURCING SOLUTIONS, EMIRATES FLIGHT CATERING: There will always be concerned somewhere in the world through
droughts, through floods, through labor shortages, and also through shipping and other delays that can happen that way.
STEWART (voice over): To tackle these issues, Emirates Airlines thinks the solution lies in Agri-tech.
DOWD: So welcome to the farm. We've got a showcase of the projects that we're currently growing in here.
STEWART (voice over): Based in Dubai and the UAE where almost 90 percent of the food is imported, they've opened their own vertical farm, larger than
four soccer fields put together and worth 40 million U.S. dollars. The company says it's the largest in the world.
DOWD: Behind me in this room we've currently got 45 and a half 1000 crops - -growing across the facility that's over 1.1 million growing at any one time.
STEWART (voice over): From kale to arugula to lettuce, the leaves produced here will be harvested, sent to Emirates flight catering and prepared into
some of the 200,000 meals that go out of this kitchen every day.
DOWD: The supply chain is such that within 12 to 24 hours of it being harvested, it will be on the place in front of them. They will taste it in
the crunch they will taste it in the freshness.
STEWART (voice over): More than growing fresh local produce, it's about making operations more sustainable and reducing water usage.
DOWD: The room environmental system that actually draws about 1500 liters a day out of the room which then gets recycled.
STEWART (voice over): But when it comes to costs, the airline says there are no major advantages yet.
DOWD: The cost is comparable to import currently, we believe we can bring further efficiencies into the efficacy that we currently grow at.
STEWART (voice over): It's a first step towards change.
DOWD: What we're doing here today is demonstrate that sustainability can be at the heart of growing fresh produce in the Middle East, it's signals the
development of a new generation of agri-tech.
STEWART (voice over): From a more stable supply chain to sustainable food production. For other businesses, the Emirates Airlines vertical farm could
be food for thought. And for passengers your meal could be playing apart in the future of agriculture, one more reason to eat your greens, Anna
Stewart, CNN.
(END VIDEOTAPE)
KOSIK: Let's take one last look at the markets. U.S. stocks mostly lower in early trading. As we wait on Fed Chair Jerome Powell is closely watched
policy speech in Jackson Hole, Wyoming. It begins just a few minutes from now.
Investors are receiving some encouraging new inflation data before the bell. The feds preferred measure of inflation, easing a bit in July and
coming in below expectations.
The President of the Kansas City Fed saying today that he's now leaning toward raising rates by only a half a percent at the central bank's policy
meeting that happens at the end of next month, instead of a more aggressive three quarters of a percent hike.
[09:55:00]
KOSIK: And finally on "First Move", that's the princess of pop. She is back. Britney Spears has returned with her first single in six years, with
a little help from the rocket man himself, Elton John, the duo releasing "Hold Me Closer", releasing this on Friday.
It's kind of a reimagining of Elton John's 1971 hit, Tiny Dancer, one of my favorites. The single is Spears first since being released from the 13 year
conservatorship that controlled every aspect of her life.
Ahead of the release, Spears said that she's learning every day is a clean slate to try and be a better person and do what makes me happy. Now that's
a mantra we could all live by. That's it for the show. I'm Alison Kosik. Follow me on Instagram and Twitter @alisonkosik. Thanks for joining us. I
hope you have a great weekend. "Connect the World" with Becky Anderson is next. I'll be back next week, see you then.
(COMMERCIAL BREAK)
END
