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Isa Soares Tonight
Russia's War On Ukraine; Russia Rejoining Black Sea Grain Export Deal; Ukraine Requests More Advanced Anti-Aircraft Missile Systems; Interview With Turkish Presidential Spokesperson Ibrahim Kalin; North And South Korea Exchanged Missile Barrages; Israel Could Have Most Right Wing Government Ever; Federal Reserve Raises Interest Rates By .75%; Chairman Jerome Powell Speaking After Interest Rate Hike; Police Cleared Streets Of Bolsonaro Supporters Protesting; U.S. Midterm Elections; Interview With Republican Strategist And Former Communications Director, Republican National Committee Doug Heye. Aired 2-3p ET
Aired November 02, 2022 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT AND ANCHOR: A very warm welcome to the show, everyone. I'm Isa Soares.
Tonight, we are waiting on the U.S. Federal Reserve to announce its latest moves on interest rates. Our team of Richard Quest and Rahel Solomon
standing by in New York to explain what it means for your money. That's coming up.
We'll also update you on new developments in the grain deal and the threat to global food security. I'll ask Turkey's presidential spokesman how they
brought Russia back around. And then later this hour, Israel looks headed to a fiercely rights of center government as exit poll suggest the far
right more than doubled its seats in the Knesset.
But first tonight, any moment now, the U.S. Federal Reserve will make an announcement about interest rates. Fed chairman, Jay Powell is holding a
press conference this hour, in about half an hour or so. And every time he's had in one in the past few months, it has been about interest rate
hikes in an effort to tame down inflation. And also, keeping a close eye, of course, on the Dow Jones.
Now, some of those rate hikes were of historic proportions. And now that the economy is showing signs of slowing, investors hope the central bank
will somewhat pivot soon and move away from its hawkish stance to a more dovish stance.
I want to go straight to Rahel Solomon and business editor-at-large Richard Quest who's at the New York Stock Exchange. And Rahel, I'm not being rude.
I'm actually looking now at the Federal Reserve page to see if we -- as we all do. We're all doing the same thing. Ignoring each other and looking for
any news. Just as we wait for this decision, Rahel, just talk us through what we can expect today.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, what we largely expect, Isa, is another massive rate hike up three quarters of one percent. That
would be the fourth time in a row that we have seen at the fourth consecutive rate hike of that magnitude. But as you have been pointing out,
that that has been raising rates since March of this year in its effort to tame inflation --
SOARES: And -- Rahel, apologies. I'm going to interrupt because I think we've got it, Richard, right? You've got it. You got your hand up.
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE AND ANCHOR, QUEST MEANS BUSINESS: Absolutely. Absolutely. The number is out. It's three quarters
of one percent that the Fed funds rate. This is the so-called technical rate, 75 basis points in the language of the market, but three quarters of
a percent in ordinary language. It takes the ranged to three and -- three and three quarters to four percent. This is the target range that they use.
And the significance here is that we've literally gone from zero to four percent in a matter of eight months. Now, what I'm going to spend the next
10 minutes or five minutes or whatever that you give me is to pass the statement. Because we have the statement now to see is there any indication
the December's meeting will temper their rate rise. They're still going to continue raising rates. But are they going to moderate that rate rise to
say half a percentage point or instead of three quarters?
SOARES: Yes, in many ways, Rahel, as Rich was pointing out, this 75 basis points, as Richard just laid out, was kind of a really baked in, right?
This is a fourth hike this year. And in many ways, with the Fed, like we've always seen with the Fed, is not so much what it does but what it says. as
Reid -- Richard peruses that information. Looks for signs.
I mean, give me a sense of what we need to be hearing today from Jerome Powell in half an hour or so. What words should we be looking for,
investors be looking for here for any, sort of, sign of what is to come back in December?
SOLOMON: Well, it's an interesting point, Isa, right? Because even as you say these three quarters of a percent that was instituted today. You're
right. It was carefully telegraphed by the Fed in sort of -- so-called Fed whisperers to certain financial media. So, you're right, it was baked in.
And so, what we're going to be listening for very closely today is any signs of a slowing, of a pullback, that they may be getting closer to that
restrictive range. Now, there is this sort of reality that the Fed and Powell will be very careful and guarded about the language that he uses
because they don't necessarily want to put themselves in a box. Because let's be honest, there are still, I believe, two jobs reports, including
one this Friday that will get before they meet again, and one CPI inflation report.
So, it's almost as if, Isa, they want to sort of signal just enough but not so much that they're really put in a box by investors and economists and
financial media but what's to come. Has walk -- walked a very fine line there.
SOARES: Richard, you've got a perplexed look. Tell me what you can read from that.
QUEST: Well, because as Rahel rightly points out, this was baked in.
QUEST: So, we want to know what's next. And so, passing the words of the FOMC. I'm going to read to you, if I may.
It talks about, in determining the future increases, the committee will take account of the cumulative tightening of monetary policy. In other,
words we've done so much of this already, let's wait and see what's happened to it. We've done one, two, three, four of these. The lags with
which monetary policy affects economic activity. In other words, we know it takes six to nine months before we really see the full effect of this. And
inflation economic development et cetera, et cetera.
Now, I interpret that as telling the markets we are well aware that we've done a lot so far and that we may have to do more but is this -- but we're
going to just be a little bit more gentle as we go about doing it. It says, if risks emerge that could impede the attainment (ph), they're not
pivoting, they're not moving, they're basically saying the message here is we're not stupid. We're going to wait and watch. But we're well aware that
we've got -- we've tripled interest rates and we need to see how this is going to work out.
SOARES: And it's a --
SOLOMON: And Isa, if I may --
SOARES: Go head. Yes.
SOLOMON: If I may just add to what Richard said. The reason why we're probably hearing that is because think about the data that we're still
getting. The job market is still very hot, right? I mean, there are still 1.9 open jobs for every American looking. Inflation has really not pulled.
So, in some ways, they're not seeing the signs that they need to start to really pull back. So, as Richard points it out, it sort of signaling that
it may be appropriate at some point but maybe not yet.
SOARES: It's a fine balancing act, and I know we'll have more details. We'd be weighing what Jerome -- Jay Powell says in, what, 25 minutes or so.
Richard, we'll touch base with you when he does speak.
QUEST: Thank you.
SOARES: Rahel and Richard, thank you very much. Of course, we will stay on top of this story. We'll bring you that speech, of course, that press
conference from Jay Powell in the next 25 minutes.
Now, Russia says it's rejoining the U.N. broken grain export deal with Ukraine. And that means Moscow will now guarantee safe passage for cargo
ships traveling from Ukrainian ports through the Black Sea. And hundreds of thousands of tons of food exports can go where they're most needed.
It's a sudden about face, let's say that, just days after Russia said it was suspending its participation. And it comes after Russia's president
spoke Wednesday with his Turkish counterpart. Let's go now to Ibrahim Kalin, spokesperson for Turkish President Recep Tayyip Erdogan, a well-
known face of the show.
Kalin, it's so great to have you back on the show. An important day to have your expertise. Explain this back and forth to our viewers around the world
from Russia. It was in, then it was out for days ago, and it's now back in again.
IBRAHIM KALIN, TURKISH PRESIDENT SPOKESPERSON: Yes, we're very happy that Russia is back in the process. Again, they suspended their part of the
agreement on Saturday after an attack on one of their ships in the Sevastopol area. They complained. They protested. They the wrote letters to
the U.N. And we spoke to them immediately. We contacted them because this is very important. This is separate from the war. Of course, everything is
related to the war. But, you know, sending the grain that is needed to places, as you have just pointed out. is of paramount importance for
So, for the last three, four days we have exerted a lot of diplomatic efforts. Our defense minister, foreign minister, and eventually our
president spoke with President Putin yesterday. When they spoke, President Putin rather rightly raised, you know, some questions about this attack.
You know, why it was done. And in their assessment, they -- the attackers used the corridor for grain exports to carry out this attack.
And putting that aside, they wrote formally to the U.N. And -- but in the meantime, we have talked to the Ukrainians and conveyed the demands or
expectations of the Russian's side to the Ukrainians. And to give them credit, actually, both sides took a very constructive approach after seeing
that, you know, suspending this agreement will be in everybody's loss or --
KALIN: -- you know, it will cost them dearly. And as a result, they've come back to the agreement. And after the call with President Putin and
President Erdogan, now we have everything back on track.
SOARES: So, what demands then, Kalin, what guarantees that Russia want as part of its return. Because I want to play, if I could, just a little
soundbite. An old clip of what President Putin said today. Have a listen to this.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): In this regard, I have instructed the defense ministry to resume our participation in this
work. However, Russia reserves the right to withdraw from these agreements if these guarantees our breached by Ukraine. In any case, even if Russia
pulls out of this deal, we will, as we said earlier, be ready to supply the entire volume of grain that was supplied from Ukraine to the poorest
countries. Which is only four percent.
(END VIDEO CLIP)
SOARES: So, Kalin, let me just clarify. I mean, did Russia ask for written guarantees that Ukraine will not use the humanitarian corridor for military
purposes? Is this what it was demanding?
KALIN: Yes, that's what it is. That was what the negotiations were about, and that's what was achieved in fact, in those negotiations. And we hope
that, you know, both sides will stick to the agreement. The Istanbul agreement that was signed about three months ago. And we hope that they
will carry this threat to the extension of the agreement which will come up in about two weeks because it's in everybody's interest.
And in fact, we've been saying from the very beginning that, you know, as part of the agreement, no military activity should be carried out in and
around the humanitarian corridor for grain export. And we hope that this will be the case. That's what the Russians demanded and that's what they
got. And the grain inside, again, has been very constructive with that regard.
Our president just spoke to President Zelenskyy about this, and they went over this. And President Zelenskyy also confirmed their commitment to the
agreement. But of course, the differences -- major differences remain on the outcome of the war, on the future of the war on what may unfold in the
days to come. But as far as the grain export deal is concerned --
KALIN: -- I think it's been safe and secure and that's good news for everyone.
SOARES: And you've been assured, of course, that Russia won't pull out of it again. But how much, Kalin, did, you know, the U.N. continue on the
deal. Turkey continue on with this deal. How much of that, basically, call Putin's bluff? Was that an element of, perhaps, Putin making a decision to
KALIN: Well, it may or may not be. But President Putin has been making a political point about the demand of grain going to poorer or underdeveloped
countries as he just said in the video that we just played. And, you know, he's been -- they've been raising this issue. If the idea was to get, you
know, the grain exports, fertilizers, and other grain products to those in need in Africa and other places, why are the, you know, European countries
getting more than -- almost half of the Ukrainian grain.
That's a political point. Of course, it's Ukraine's grain. They can sell it to whoever they want to. But as far as the international grain markets are
concerned, when the operations start, even like in a matter of four days, the grain prices went up. And the sense, in fact, until then, over the last
three months, the grain prices were going down.
So, I think it shows how sensitive this issue is. That speaks to the other part of the deal, which is the Russian fertilizers and grain exports that
need to be exported to international markets. The Russians have been facing some issues and problems. There is no formal embargo on Russian exports.
But shipping companies, insurance companies, and other logistical companies, they are afraid of secondary sanctions. So, they're kind of
staying away from doing any business with the Russians.
We -- as the International Community, in fact, we have to do something about this. We've been telling our European friends, colleagues in Europe
and the United States also, if you want the grain to continue and get the Russian grain and fertilizers, including ammonia, go out, you know, to the
international markets, they have to be given some assurances.
It doesn't mean that we agree to Russia's war plans or the, you know, the purpose or goal of this war, in any way. But as far as the grain deal is
concerned, in order to protect it, I think they will have to be given some assurances. Those companies and others so that -- not only Ukrainian, but
also Russian exports can go out. So, that, you know, international markets will come in where they are.
SOARES: Ibrahim, let me ask you finally, a final question. You and I have had various conversations already this year. And as I've mentioned in our
previous conversations, you know, Turkey is emerging as kind of the dominant player in this grain deal, and making a big diplomatic push as
well. This is something that you and I have discussed. Where are we on this? What is President Erdogan telling President Putin? What is he
advising him in terms of the war and where the state we're at in the war right now.
KALIN: Our president has been speaking to President Putin and Zelenskyy on a regular basis. And advising both sides to de-escalate to the extent
possible. I know this sounds a bit naive, you know, given the circumstances of the war. But our assessment is that -- and this is what our president
has conveyed to both leaders in his various conversations including the call President Putin yesterday and the call that just happened with
President Zelenskyy today, that there is no really military breakthrough here.
It doesn't look like either side is able to have a decisive victory on the battlefield. The longer this war continues, there might be different
attacks, different tactics, different, you know, bombings and things like that. But they will all end up creating more destruction and losses for
both sides. And three months down the road, six months down the road, as we have discussed on this show, we will be, again, talking about the need to
come back to the negotiating table.
But during that time, we will have many more losses of life, territory, and destruction and other things. There is, of course, the nuclear threat. It's
a possibility. Of course, our president has been raising this issue with both leaders again. He spoken to President Putin about this and they denied
of any intention on their part to go nuclear.
And President Zelenskyy again reiterated their point also that, you know, it's a lie to claim that Ukrainians are preparing to use dirty bombs,
chemical weapons, et cetera. But even the talk of it, you know, is a sign of danger, you know.
SOARES: Yes, yes.
KALIN: You know, when you -- when the stakes are so high, I think it's really important is -- not only for our president but also for other world
leaders, you know, to take a more realistic approach and assessment of what's happening on the ground. But this is, at least, what President
Erdogan has been telling both President Putin and President Zelenskyy.
KALIN: Stay away from anything nuclear or chemical. But also try to find a way for a diplomatic solution. You know, wars end either on the
battlefield, even after that you have negotiations, or they and within negotiations get serious.
SOARES: Let's hope --
KALIN: We will likely see the second scenario -- ye -- to happen.
SOARES: Let's hope they were listening. Let's hope Putin was listening to that.
KALIN: Let's hope, surely, because this is our --
SOARES: Ibrahim Kalin --
KALIN: -- this is our effort --
SOARES: -- Ibrahim Kalin, always appreciate you taking the time to talk to us in the show. Thank you very much for your time. Thank you very much,
sir, for the time. Ibrahim Kalin there.
Now, I want to stay in Ukraine because Ukrainian officials say they are working to get more anti-aircraft systems from allies. As Russia plants
import more ballistic missiles and attack drones from Iran. Ukraine's air force, as right now, it can't defend these types of weapons as Moscow
prepares to receive more deadly equipment. Its forces are preparing new defensive positions.
Nic Robertson joins me now from Kramatorsk in Eastern Ukraine. And Nic, as we really toss to you, right now, we saw a map just right there of Kherson.
Just talk us through the situation in Kherson where Moscow, of course, is preparing to take up those defensive positions.
NIC ROBERTSON, CNN'S INTERNATIONAL DIPLOMATIC EDITOR: Yes, the perception on the Ukrainian side is that Russia is putting more troops, new recruits
into Kherson. That they are planning to put them into civilian neighborhoods, towns and villages. That they do have a, sort of, reserve
And we've heard this from Russian officials, very interestingly today, for the first time admitting that they actually have a problem with the way
that their troops behave inside Kherson. Admitting and saying that they wouldn't stand for looting and abusive behavior. And that any drunkenness
by their troops and that if any of the local population saw that, then they should report it to the civilian authorities. Whether or not people would
feel confident enough and safe enough to do that, it's not clear. But it does seem to indicate a problem that Russia is having with its troops,
trying to intermingle with a Ukrainian population inside Kherson.
In terms of military gains, Ukraine is still trying to push towards the city. But it doesn't seem that they're making -- taking significant
territory, taking some territory. But at the moment, this looks like it's going to come to what Russia's calling it, sort of -- it's sort of, last
offensive line, if you will. But they are planning to increase their manpower and try to hold on to the city despite the fact that they're
pulling everything of value and civilians across the river out of harm's way for Ukraine's impending advance.
SOARES: Nic Robertson for us there this evening in Kramatorsk, Ukraine. Thanks very much, Nic.
While the U.S. is accusing North Korea of secretly shipping artillery shells to Russia to use in its war on Ukraine, U.S. officials say North
Korea is trying to hide the shipments. Making a look as if they're being sent to other countries. This comes as North Korea makes more brazen moves
of its own. Really in its own region.
South Korea says the north launched a record number of short ranged missiles in the day. Almost two dozen on Wednesday. South Korea responded
with three air to surface missiles of its own. For U.S. reaction to these all developments, let's bring in CNN's Katie Bo Lillis in Washington.
Katie, let's start first of all, with that intelligence at the North Korea supplying weapons to Russia. Do we have any idea of the stage of the size,
the frequency of these shipments, and how exactly and what they're hiding them.
KATIE BO LILLIS, CNN INTELLIGENCE REPORTER: No, at this point, there's still a lot of unanswered questions. And it's important to note right off
the bat that it's not clear that the United States has even seen any of these artillery shells actually show up on the battlefield in Ukraine.
National security council official John Kirby saying today that the United States is still monitoring to determine whether or not Russia has actually
received the shipments.
And again, we don't know the size of the shipments. How many shells are meant to be. And the U.S. officials have previously said that they believe
that the deal covered millions of artillery shells.
But thanks to new intelligence that has been recently declassified, we do know that the Biden ministration does believe that this deal is moving
forward. Officials are closely tracking to watch these shipments, which according to this newly declassified intelligence, they believe that North
Korea is trying to obscure by making it look like these shipments are going to the Middle East or are going to North Africa.
But again, still, lots of unanswered questions about exactly what this looks like and what the impact on the battlefield is going to be. Russia,
of course, has been conducting this punishing artillery war in the front lines that, according to one military analyst that I spoke to today, has
burned through as many as millions of shells, right.
So, it is possible that these North Korean shipments, if they do in fact come to fruition, could make a pretty significant difference for Russia.
Could fill a pretty important hole for Russia on the battlefield depending on how many are sent.
SOARES: Yes, of course, that is critical. Let me ask you about, you know, what we have seen today. North Korea firing as many as 23, I think,
missiles of different types to the east and west of the Korean Peninsula. What is the U.S. intelligence, Katie, saying as to why North Korea keeps
LILLIS: Well, generally speaking, U.S. officials believe that these kinds of tests do serve a practical purpose for Kim Jong-un, right. Like, they're
a way of refining these ballistic missile systems that North Korea has said publicly that it is working on improving. That it is working on developing.
And officials -- there are some analysts and officials that also believe that these kind of high-profile, sort of, spates of testing like this are a
way for Kim Jong-un to kind of bolster his own domestic political strength inside the country, particularly at a time when COVID has kind of
devastated them economically. The food situation, according to our sources is not great in North Korea right now.
But all of that said, why North Korea is conducting any given missile test at any given moment is sort of an enduring mystery for U.S. intelligence
officials who will tell you that North Korea remains one of the most opaque and difficult targets that they face in trying to, sort of, understand the
motivations of really just one man who is at the center of the decision- making process. So, I think even though you will see officials who are closely watching this as an escalation, they may not have a specific answer
on why now.
SOARES: Katie Bo Lillis, really appreciate it. Thanks, Katie.
And still to come tonight, Prime Minister Benjamin Netanyahu looks set to lead Israel's most right-wing government ever, that is according to partial
results coming through in Israel. We have a live report of that straight ahead.
SOARES: Now, Benjamin Netanyahu appears on the brink of leading the most right-wing government in the history of Israel. With 86 percent of the
votes counted in Tuesday's election, his Likud Party and its allies are projected to win 65 seats in the next seat, enough, in fact, to secure
majority. Now, if that holds, the former prime minister would return to office for a record six term despite ongoing corruption trial.
Netanyahu relied on the support of the far right party that could now expect key cabinet positions. One of its leaders, Ben-Gvir, has been
convicted on racism in tourism charges. During his victory speech, his supporters could be heard chanting death to terrorists.
Let's get more now from CNN's Hadas Gold live in Jerusalem. And, Hadas, I know that not all the results are in as of yet. But it does look like
Benjamin Netanyahu is a better majority than anyone expected. Just explain to our viewers how he mounted this come back, first of all.
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Yes, I mean, when we were looking at the opinion polls leading up to election day, none of them were showing
that Netanyahu and his allies would have as big of a majority as so far, it seems, that they're getting. The best that he was getting in opinion polls
was something like 61 which is the exact number you need to have a majority in Israeli parliament and have the opportunity to become prime minister.
And now, are looking at a 65-seat majority. That's quite the cushion.
Now, while the final votes are still being tallied, and that could change the math a little bit. And if some of the smaller parties diminish to pass
the threshold. They could take some votes away from that block. But even if they take four votes away, there are still -- that still Netanyahu and his
allies down to 61, so they've got quite the cushion.
So, it's really hard to see any other path forward for the current coalition government soon to likely be the opposition once again. And most
likely, Benjamin Netanyahu will become prime minister. And how he did it was first of all, voter turnout this year was at -- and one of the all-time
highs in several years. They hadn't seen turnout. Some -- at several points during the day, it was the highest it had been since 1999.
And it seems as though that turnout might've been -- quite a bit more from the right-wing, and especially from young right-wing voters who were
excited by Benjamin Netanyahu's new alliances with these far-right parties that have exploded in popularity. One of them, Religious Zionis slash
Jewish power, it's these two parties who formed a block together. They may have as many as 14 seats in the Israeli parliament. Isa, that would make
them the third largest party in the Israeli parliament. Just behind Netanyahu's Likud Party, and Yair Lapid, the current prime minister's, Yesh
SOARES: Yes, and like you said, he seems to have depended a lot more on the far right, these two parties particular. One -- the leader, I think, is
of the Jewish power. It's a leader is racing quite a few eyebrows on this side, I can tell you that much, Itamar Ben-Gvir. You focused on him this
week. I want to play a little clip for our viewers and we can chat afterward. Have a look at this.
(BEGIN VIDEO CLIP)
GOLD (voiceover): Any coalition that would bring Netanyahu back to power will likely need to rely on the growing right wing religious Zionism,
Jewish power party. Partly led by the extremists Itamar Ben-Gvir, once convicted for inciting racism and supporting terrorism. An idea that either
delights or terrifies the voters in the market.
UNIDENTIFIED MALE (through translator): He is a Zionist. And the Arabs will know exactly where they stand with him. They are guests here and we
are the owners of this land, and not them.
UNIDENTIFIED MALE: Itamar Ben-Gvir is a -- he says and he does. He will do anything to show who's the boss.
UNIDENTIFIED FEMALE: It's very scary because I think it's disaster, even more so than now.
UNIDENTIFIED MALE: I think it's very bad for the country. Because he kind of brings us 20, 30 years -- the last 20 to 30 with the intifada and the
problems with Arabs. We want to live by peace. And it will be very difficult Ben-Gvir.
(END VIDEO CLIP)
SOARES: Hadas joins me. And, Hadas, how much then will this be a challenge, do you think, for Israel's international allies given everything
we just heard from that little clip of yours.
GOLD: Yes, I mean, Itamar Ben-Gvir is definitely seen as -- or was seen as a fringe figure in Israeli politics. An extremist. He's a settler. He lives
in a west bank settlement. He has been -- he's actually a trained lawyer who has defended often settlers and other Israeli and Jews who have been
accused of violence. And he is known for this, sort of, public antics.
He would -- he shows up regularly in these flashpoint neighborhoods, like Sheikh Jarrah in East Jerusalem in the last few weeks. He even showed
brandishing a gun and calling on police to shoot Palestine protesters if they threw rocks.
And he has quite a colorful history. He has been convicted in the past, as we noted. Have been inciting racism against Arabs and supporting terrorism.
And up until a few years ago he, Isa, he actually had a portrait in his home of the man who massacred Palestinians while they were praying in
Hebron in1994. That man himself was killed during that attack. But he honored that person.
And so, to -- for many Israelis to see that this type of person might have a ministerial position, it's hard for them to believe. I'll read you also
some of his things that he said during his campaign, some of his platforms, or also just some of his qualifications. He was disqualified for mandatory
military service. He supports the annexation of --
SOARES: Hadas, I'm going to interrupt you now.
GOLD: He most relied --
SOARES: Hadas, I'm sorry to -- I'm going to interrupt you because we are waiting to hear from the Fed chairman. Let's listen in.
JEROME POWELL, CHAIRMAN. U.S. FEDERAL RESERVE: My colleagues and I are strongly committed to bring inflation back down to our two percent goal. We
have both the tools that we need in the resolve that it'll take to restore price stability on behalf of American families and businesses. Price
stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work
In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. Today, the FOMC
raised our policy interest rate by 75 basis points and we continue to anticipate that ongoing increases it will be appropriate. We are moving our
policy stance purposefully to a level that will be sufficiently restrictive to return inflation at two percent.
In addition, we're continuing the process of significantly reducing the size of our balance sheet. Restoring price ability will likely require
maintaining a restrictive stance of policy for some time. I will have more to say about today's monetary policy actions after briefly reviewing
The U.S. economy has slowed significantly from last year's rapid pace. Real GDP rose at a pace of 2.6 percent last quarter but is unchanged so far this
year. Recent indicators point to modest growth of spending and production this quarter. Growth and consumer spending has slowed from last year's
rapid pace, in part, reflecting lower real disposable income and tighter financial conditions.
Activity in the housing sector has weakened significantly, largely reflecting higher mortgage rates. Higher interest rates and slower output
growth also appear to be weighing on business fixed investment. Despite the slowdown in growth, the labor market remains extremely tight with the
unemployment rate at a 50 year low, job vacancies still a very high, and wage growth elevated. Job gains have been robust with employment rising by
an average of 289,000 jobs per month over August and September.
Although job vacancies have moved below their highs and the pace of job gains has slowed from earlier in the year, the labor market continues to be
out of balance with demands substantially exceeding the supply of available workers. The labor force participation rate has little change since the
beginning of the year.
Inflation remains well above our longer run goal of two percent. Over the 12 months ending in September, total pc prices rose 6.2 percent, excluding
the volatile food and energy categories. Core PCE prices rose 5.1 percent. And the recent inflation data again have come in higher than expected.
Price pressures remain evident across a broad range of goods and services. Russia's war against Ukraine has boosted prices for energy and food and has
created additional upward pressure on inflation. Despite elevated inflation --
SOARES: Now, you've been listening to Jerome Powell there of the Federal Reserve. Really outlining, explaining his decision for that rate hike that
we saw, 75 basis points. It is the fourth hike this year as of course the Fed tries to put a lid on inflation. He said inflation back down to two
percent. That is the goal price stability, is the bedrock of our economy.
But he did say -- and I think Richard's here with me, he did say -- what stood out to me, Richard, from what I've heard so far is that he said we
will likely need restrictive stance of policy for some time. Is what I wrote down.
SOARES: So, not so dovish as many were expecting perhaps.
QUEST: No, and this phrase restrictive policy. So, the last -- goodness knows how many years have been accommodative, highly accommodative.
In other words, pouring fuel on the fire. Now, you're going to a restrictive -- you basically go, Isa, from highly accommodative, where your
feeding money in to neutrality, normalization, if you will. Where you are not growing and you're not shrinking the economy. And then you go
restrictive. And we are now just about into restrictive territory.
But what he's saying is we're going to have to go further. And that means maybe pushing rates to four and a half, five percent. The only -- that bit
is given. It's in the statement.
QUEST: That there will be further rate rises. The only issue today or for the next few months is how fast and how long are they going to wait to see.
The patient has taken a very large dose of medicine so far. Now we need to see if it's actually going to cure them.
SOARES: And you're now -- the NYSE, just give us a sense of how our market is doing. Lori (ph), can you just bring them up, and tell me how they're
doing, Richard, reaction to this.
QUEST: Well, look at that. Up three -- I mean, we were down, now we're up. And the reason we are up, quite sharply is really simple. The market thinks
-- they may be wrong, but the market thinks that there is going to be -- they're going to slow down the rate rises. The market thinks that the
indication here is that they're going to temper the speed at which they put more rises.
But all caution you on this. We had exactly the same reaction last month in September. The market roared up, I think the best part of 1,000 points, and
the next day, fell out of bed. So, you pay your money or you take your choice. When the statement came out -- when the decision came out, there
was a roar here. Overnight, calmer and cooler heads will determine what it means.
SOARES: Yes, we shall probably touch base tomorrow, Richard. Probably be a very different conversation. Richard Quest for us there at the NYSE. Thanks
very much, Richard. Appreciate it.
QUEST: Thank you.
SOARES: I want to take you to Brazil now because Brazilian police are clearing out pro-Bolsonaro protesters with few road-blockades report on
Wednesday. The disruptions that came in response to Sunday's election shows really the deep political divides across the country. And if police are
having really, nonetheless, you can see there in Sao Paulo, they fired water cannon and tear gas to clear the demonstrators.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
SOARES: But many Bolsonaro supporters are not going away quietly. This crowd converged on army headquarters, chanting their displeasure. Bolsonaro
says he will cooperate with the transfer of power after losing Sunday's election. But the question now is, how does the public really move forward?
CNN's Paula Newton is joining us once again from Sao Paulo.
And Paula, at this time, roughly, yesterday, we heard from Jair Bolsonaro, you and I were discussing his speech. Very vague, very opaque. How are his
words being interpreted today?
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: You know, basically, when you and I spoke right after that speech, we had an instant reaction from
protesters on the scene. And that is the way it continues to play out today, Isa. As you and I have discussed, his statement was terse.
NEWTON: Two minutes and it was not categorical. Although he asked protesters to be peaceful, he didn't admit defeat, he didn't say that the
results of the election were fair and transparent. That he accepted those. And for that reason, protesters have interpreted this election quite
frankly, Isa, still up for grabs. And I want you to hear now from everything that plays out at some of these protests. Take a listen.
(BEGIN VIDEO CLIP)
NEWTON (voiceover): As President Jair Bolsonaro prepare to finally break his silence, police forces across the country moved to break up hundreds of
blockades. Snarling traffic, slowing supply routes, and rattling already frayed nerves.
Police were acting on orders to use force, orders that never came from Bolsonaro himself. Instead, in a terse two-minute statement, he said he
would respect the constitution. But he neither admitted defeat nor recognize the results of the election. And had this to say to supporters
blocking roads across the country.
JAIR BOLSONARO, BRAZILIAN PRESIDENT (through translator): Peaceful demonstrations will always be welcome but our methods cannot be those of
the left like property invasion, destruction of goods, and restrictions on the rights to come and go.
NEWTON (voiceover): On the barricades, some of the protesters mounting insurgent campaigns nationwide had this to say.
UNIDENTIFIED MALE (through translator): This was a statement where he didn't say anything conclusive. It gives us the impression that there was
something wrong with the elections. That is a plus for us to continue our stand and keep protesting.
NEWTON (voiceover): Many here say they are committed to a patriotic cause. Standing up for the president they elected.
UNIDENTIFIED MALE (through translator): Country and freedom, just that. We don't accept those who won, not just us but a large part of Brazilian
NEWTON (voiceover): These protests, sporadic, predictable and yet effective are taking a damaging toll on this fragile economy and more. This
trucker was stuck on the road overnight. And his wife fell ill and had to be taken to the hospital.
UNIDENTIFIED MALE (through translator): Personally, I'm against this. The people have made their choice. If they wanted to lock things down, they
shouldn't do it to business. People have to work.
NEWTON (on camera): Even among officials that back Bolsonaro, there is a great reluctance to support any kind of civil disobedience. It's the reason
that they have ordered these blockades to and even if police have to use force. They do not believe that these kinds of protests will result in any
of the division in the country.
RODRIGO GARCIA, SAO PAULO GOVERNOR (through translator): There will not be a demonstration or a riot that will society not recognize the result of the
polls to the victors. The mandate to the losers, the acknowledgment of defeat.
NEWTON (voiceover): After a bruising campaign and a vague signal from Bolsonaro that he will give up power to president-elect Lula da Silva,
Brazil seems destined for more political division. Now, playing out on its streets and jeopardizing an already tense transfer of power.
(END VIDEO CLIP)
NEWTON (on camera): And all of that tension, once again, Isa, playing out on the streets all over Brazil. Again, police confronting them but there
have not been mass arrests. So, what we're learning and what we've seen for ourselves is that when these protesters, they confront the police. Tear gas
is used to actually clear them, to clear the blockades.
But then they either just stay by the side of the road or they continue to camp out there even overnight. At this point in time, there is -- Bolsonaro
seems to have been able to unleash really those protesters out on the streets without really giving any clear indication that he wants them to
leave. When he talked to protesters, too, they say that they are. And that what they are doing is fully within the law and constitutional. Isa.
SOARES: We shall keep an eye on how all of this develops. Of course, inauguration Lula's only in January. Paula Newton for us there in Sao
Paulo. Thank you very much, Paula.
And still to come tonight, with less than a week to go before the U.S. midterm election. It's the Republicans are edging ahead. We have the latest
CNN polling up next.
SOARES: Welcome back. In the U.S. the, midterm elections are now less than a week away. A new CNN polling indicates that 51 percent of likely voters
would choose the Republican candidate. You can see there over, really, the 47 percent of the Democratic candidates. That's not the only numbers that
we found interesting. That's in terms of candidates.
The other question, have a look at this, half of adults we are showing here, 50 percent do not have confidence that the elections will reflect the
will of the people. The question that was asked, are you confident that U.S. elections reflect the will of the people. 50 -- 50 say, yes. 50 say,
no. That is huge concern. Especially following, of course, the events we saw in the Capitol on January the 6th.
And then if we look more closely, that same question. Breaking it down. Republicans are most concerned, as you can see there, with the fairness of
the process. Almost 60 percent of them, as you can see there, think the elections won't reflect the will of the people. So, that's Democrats
saying, yes, 61 percent, 59 percent for Republicans. It paints quite a picture.
Let's dig into all of this, of course, with Doug Heye, a Republican strategist and former communications director for the Republican National
Committee. Doug, great to have you on the show. I want to show our viewers, if I can, really one -- the -- some of the issues, I should say, that seem
to matter most to Americans.
We are looking now on our screen. Inflation, economy -- inflation is part of that one. Economy at 51 percent. Abortion at 15. Voting elections at
nine percent and so forth. If we focus, Doug, though on the economy -- I mean, it's important that it's the most important issue given of course
what we just heard from Jerome Powell with that rate hike.
But, you know, how do you see this playing out? Because Americans, three -- nearly three quarters, I think, of Americans say they -- things are going
badly. 75 percent of America say the economy is in recession. Is there anything this government can do right now, this administration, in this
final push here, in this final six days.
DOUG HEYE, REPUBLICAN STRATEGIST AND FORMER COMMUNICATIONS DIRECTOR, REPUBLICAN NATIONAL COMMITTEE: The first thing I would tell this
administration is talk about jobs, the economy, and inflation all day, every day. And so, you know, I live right by the Capitol at the union
station, the train station is up three blocks me. President Biden will be speaking there tonight on the importance of democracy and ensuring faith in
our elections, as you referenced to the poll numbers earlier.
HEYE: these are important topics but this is not where voters are. And it's not that it's not where Republican voters are, it's not where all
voters are. Every day in American life, and I know it's the same in the U.K. and throughout --
HEYE: -- and throughout the world. Every day people are spending more money on everything. Every day I go to the grocery store. Something is more
expensive than it was the last time. And even if you don't have a car, you see the gas prices. This is what this administration should be talking
about all day, every day. And the fact that the president is making a primetime speech not on the number one topic of -- for voters, to me, is
SOARES: Why? Then why is he talking about, obviously, the expression of fears of the democracy? Why do you think, Doug, he has decided not to talk
about the number one issue if it's clearly as we've just outlined is the most important, economy and inflation? Because -- I mean, you could be
saying, as opposed -- I was looking that -- the Republicans are more engaged. The handling of the economy is making Republicans more
enthusiastic to come out and vote than Democrats here?
HEYE: Yes. Look, sometimes when your opponent makes a mistake, you don't know why they've made the mistake. And it's one of the reasons it's
surprising to me is you mentioned the abortion number earlier. That number is much smaller today than it was after the Dobbs decision. What we have
seen is that poll after poll shows that independent women, white working- class women are moving away from Democrats into the Republican territory right now, into the Republican voting files because of the issue of the
To some extent, crime as well. But the economy being the number one driver. So, losing sight of that. And again, I share a lot of concerns with
Democrats on the faith on our -- in the questioning of faith in our elections in the state of our democracy. But voters are reacting every day
of their lives to inflation right now.
SOARES: How much then is this a hill to climb, really, for Democrats as we showed our viewers that first poll really 47 percent would vote for
Democratic candidates. I mean -- and the numbers, 51 percent will likely vote. This is quite a hill to climb isn't it for democrats right now, Doug?
HEYE: It's a big bill, Isa, that only gets bigger every day. And what we see is, whether we are talking house races, senate races, our
gubernatorial, every day we see races that are moving more into the republican territory. Races that we weren't even necessarily talking about
three months ago or six months ago are now in play.
So, let's say, in New York with a congressional race for Sean Patrick Maloney in the, democrat who runs the democratic campaign committee, or
Kathy Hochul, all the democratic governor.
They both have real races. And whether they win them or lose them, the fact that we are talking about them means this playing field has expanded much
more for republicans. They are looking at winning in places where they didn't think they could just a few weeks or few months ago.
SOARES: And let me ask you this, Doug, how much do you think, you know, if some of Trump's supporters, some of those who are throwing their hat in the
ring, if they win here, what is the likely chance that Trump might also through the heart of the ring?
HEYE: Oh, what Donald Trump is a going to do what Donald Trump is going to do regardless. I think he's already made up his decision. It's just a
question of timing. And if some of these more Trumpy candidates lose --
HEYE: -- the conversation is going to be an interesting, because some fingers will be pointed at Trump as they should be. Some fingers will be
pointed at Democrat that funded some of these Republican campaigns in the hope that they could beat the Trumpy extreme candidate.
So, it's going to be interesting to see, you know, the fallout on that. But to address the numbers that you showed earlier about Republican lack of
faith in voting, I would very cynically say to you that if Republicans have a big night, Republican voters are going to feel that the elections were
free and fair after all.
SOARES: That -- and that basically says everything, doesn't it? Doug, really appreciate you taking the time to speak to us. Doug Heye there
joining us --
HEYE: Thank you.
SOARES: -- there from the U.S. Thank you, Doug. I'll be back after this short break.
SOARES: And finally tonight, the culinary world mourns food writer Julie Powell, the author of "Julie and Julia" who has passed away at the age of
49. In 2002, Powell challenged herself to make all 524 recipes from a classic French cookbook in just one year. Her journey really catapulted her
to fame with a blockbuster movie of the back, really, "Julie and Julia" led by Meryl Streep, as well as Amy Adams. I love them.
I want to share one piece though of wisdom coming from her on life really that she said. She said, I thought if life was all about -- what was all
about -- I don't know, confidence, or will, or luck -- she writes. Those are some of the good things to have, no question. But there's something
else, something that these things grow out of and that is joy. Great quote of the night. I'll leave you with that thought for tonight.
And one quick programming note, if you're here with us, join us on Thursday for our second annual Call to Earth Day. A 24-hour global day of action to
raise awareness about environmental issues and to engage in conservation education. And you can follow along online at our special page
And before we go, I want to have a quick look at the Dow, if you could bring it up for us here. It's been -- moving quite a bit. We need to try
and figure out how to try and interpret the top story tonight. The Federal Reserve raising interest rates once again. The fourth hike we're seeing. We
saw a bit of a lift here in the green. But now it's dropped back down as we heard from Jerome Powell talking about restrict -- a more restrictive
So, exactly what Quest was predicting -- Richard Quest was predicting in fact when he and I spoke in the last 20 minutes or so. "Quest Means
Business" will have much more on the Dow and the moves at keeping the eye on this number up -- down right now, half of one percent.
Thanks very much for watching tonight. Do stay right here, Amanpour is up next. I will see you tomorrow. Have a wonderful day. Bye-bye.