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Isa Soares Tonight
GDP Growth Reaches 3 Percent; Trump to Impose a Russian oil "Penalty" on India; Federal Reserve holding Interest Rates Steady; U.S. Sanctions Brazilian Supreme Court Justice; Major Technical Issue Hits U.K. Airports. U.S. Federal Reserve Holds Interest Rate Steady Despite Pressure from Trump; Earthquake Magnitude of 8.8 Triggers Tsunami Alerts Across the Pacific; Flights in London Airports Grounded Due to Technical Issues. Aired 2-3p ET
Aired July 30, 2025 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[14:00:00]
ISA SOARES, HOST, ISA SOARES TONIGHT: Hello, and a very warm welcome, everyone, I'm Isa Soares. Tonight, we are beginning with breaking news from
the U.S. Federal Reserve announcing its latest decision on interest rates. We're going to go straight to Richard Quest as we wait for those numbers.
And Richard, we are expecting, I think it's fair to say --
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Yes --
SOARES: The markets are expecting unchanged rates to be unchanged.
QUEST: Yes --
SOARES: What are you seeing?
QUEST: We've got exactly that. Rates have just been announced. Rate remains unchanged. The Fed funds rate stays at 4.25 percent to 4.5 percent.
So, that was widely expected. That's what the Fed had led the market to believe. What we're looking for is to see exactly who dissented. How many
dissented? There were two dissents --
SOARES: Yes --
QUEST: Which came through -- I'm just trying to get the names of the dissenting, bear with me one moment --
SOARES: Nowhere -- as you look for the names --
QUEST: Because I'm also getting -- yes --
SOARES: Richard, I know that the two of the Fed governors that were potentially going to dissent was Christopher Waller and Michelle --
QUEST: Yes --
SOARES: Bowman, right? I wonder if it's the same --
QUEST: Yes, I'm very well -- they were the ones that did. Here we go. I've got the statement now just being printed in --
SOARES: Yes --
QUEST: Front of me. Voting for the policy, the chairman, blah-blah -- voting against the decision, Michelle Bowman and Christopher Waller, who
preferred to lower the target rate by a quarter point at this meeting. So, this is interesting because much is made of the fact that it is rare.
I think you've got to go back several decades to get two dissenters against policy of the chair. The chair never wants to be in the minority. But here
you have two dissenters, and I think we can make a lot of this or nothing, because we know they are going to cut rates, and they will cut probably in
September and twice before the end of the year.
So, it's really not a question of if it's a when? And Jerome Powell just doesn't feel now is the moment -- I've got the statement here now in front
of me -- sorry, go ahead, Isa.
SOARES: No, I was going to ask you, yes, maybe we're reading too much into this, Richard. But it does speak to the division within the Fed and within
the U.S. government, of course, who has been calling President Trump for Powell to act. And he's been very vocal about this.
QUEST: Yes, he has, but there's a huge gap between what the President wants and what's going to happen in any case.
SOARES: Yes --
QUEST: The President has said he believes policy rates should be down at 1 percent. Well, that would be emergency rates in times of crisis. At the
very best, we're looking at maybe a half, three quarters of a point off over this period in the short term. The U.S. economy does not need monetary
stimulus of the sort of 1 percent or 2 percent, it's growing quite nicely at around 3 percent, we've got the growth numbers this morning, they were
better than expected.
We know that unemployment is low. So, both sides of the Fed's mandate, price stability and full employment, they are fairly evenly balanced at the
moment. And now, it's just a question of tinkering with the policy rate, lowering it to give that little bit of extra oomph to an economy --
SOARES: Yes --
QUEST: That's already doing rather well.
SOARES: Yes, let me ask you this, because according to CME watch tool, I think there's a 64 probability, Richard, of a 25 basis point reduction in
September. Just explain to our viewers why then, what data are we --
QUEST: Yes --
SOARES: Looking for to try to -- trying to clarify the state or the health of the U.S. economy.
QUEST: I could -- they were too real. Think of it as being two bunches of information. The first is a jobs numbers we're going to get that at the end
of the week. We've got the GDP number. We've got inflation numbers. So, we're getting a really good range of data that shows the U.S. economy is
humming along nicely and can afford to have a rate cut without too much risk of increasing inflation.
But what we're also getting is greater certainty on tariffs. Now, we now know the EU massive exporter to the U.S., 15 percent. We know this China
deal is going to be extended in some shape or form. We know what other major exporters tariff rates are. So, we can extrapolate that data into
inflation into growth.
[14:05:00]
We sort of -- you know, Jerome Powell has said, we -- the tariff data so far has all been skewed because of front loading. Get the goods in before
the tariffs. Well, now, we can have a longer term view because we know what the numbers are going to be. That certainty can be put into the data. The
models will tell them, is this inflationary?
And therefore, safer ground. It's all about risk, remember. Balance of risk, Isa, and the balance of risk takes you into safer ground for
September quarter point. I -- take it to the bank.
SOARES: And the Dow Jones, Richard, pretty flat. I mean, this is very much a --
QUEST: Thank you --
SOARES: Decision, the markets were expecting, of course, we expected here from Jay Powell in 25 minutes, of course, that is -- that has been --
QUEST: The question --
SOARES: What he says. Go ahead, Richard --
QUEST: The question, yes, the question for Jay Powell will be all right, you've got two troublemakers --
SOARES: Yes --
QUEST: Who want you to cut now! Is this going to influence you? He's going to tell us that he's not influenced by the President, he's influenced by
the data. Data dependent, bish-bash-bosh, and on we move.
SOARES: We shall see how he defends that decision. Richard, as always, good to see you. Richard will be back --
QUEST: Thank you --
SOARES: With "QUEST MEANS BUSINESS" a bit later. We're going to leave that for just a moment, we'll keep our eyes, of course, on the stock markets, on
the Dow Jones, we'll bring you Jay Powell when he speaks and addresses the media in less than 25 minutes -- 24 minutes or so, time. Now, from Russia
to Japan, to the U.S. west coast, millions tonight are quite literally breathing a cautious sigh of relief following a massive earthquake.
No major injuries have been reported after the 8.8 magnitude quake. Among the strongest ever recorded, in fact, struck Russia's eastern coast. The
U.S. geological survey says more than 100 significant after-shocks have been recorded near Russia in the hours following the earthquake. And this
video captures the panicked sea lines, you can see, they're diving into the water as the quake hits.
Huge waves reached more than 1.5 meters at one point in Hawaii. Tsunami alerts sent many people scrambling for higher ground, including some cruise
ship passengers.
(BEGIN VIDEO CLIP)
JEFFREY BOOKER, CRUISE PASSENGER STRANDED IN HAWAII: We were up visiting Volcano National Park, and saw the tsunami warning go off on our phones,
and then one of the tour operators from our cruise ship, the Pride of America, said, everyone back to the ship as fast as you can. Ship's leaving
at 330. And well, we knew at that point we weren't going to make it. So, it's pulling away now.
(END VIDEO CLIP)
SOARES: Well, all tsunami warnings along the U.S. coastline have now been downgraded. Officials say the worst is over, but they are urging people to
remain vigilant. More now from CNN's Marc Stewart for you in Beijing.
(BEGIN VIDEOTAPE)
MARC STEWART, CNN INTERNATIONAL CORRESPONDENT (voice-over): Surgeons try to keep steady, holding on to their patient and equipment as a huge 8.8
magnitude earthquake violently rocks the operating table at this Russian Cancer Center Wednesday. The quake struck off Russia's far eastern coast
around 11:25 a.m. local time, sending waves crashing into shoreline towns nearby and rattling furniture inside homes and offices, even damaging this
kindergarten.
"At kindergarten number 15, there was a collapse of the building facade, but thank God no one was injured. There were no children", said this local
official. Waves also crushed the Japanese coastline. People rushed to the top of this fire station for safety, standing on the roof after a tsunami
warning was issued.
The tsunami warning extended across the Pacific Ocean coastline. In Hawaii, officials warned of potential 10 foot waves.
(on camera): California, Oregon, Washington and Alaska also saw waves. This quake is tied as the sixth strongest ever recorded, and around 2
million people were ordered to evacuate in Japan alone. The remaining tsunami warnings have now been downgraded. Marc Stewart, CNN, Beijing.
(END VIDEOTAPE)
SOARES: Let's go to Santa Monica now, California. CNN's correspondent Gonzalo Alvarado. And Gonzalo, I imagine the focus now turns to Central and
South America with the warnings. What are you hearing from governments there?
GONZALO ALVARADO, CNN CORRESPONDENT: For example, in Mexico, the Mexican President Claudia Sheinbaum, has said that they activated the tsunami
warning just as a precautionary action. As of right now, the Mexican government haven't -- hasn't reported any major damages. And then -- but
nevertheless, in the southern California, also Ecuador, there's still tsunami warnings, it's still into effect.
Now, here on the west -- the U.S. west coastal areas, Isa, is there's still -- there's highest levels of -- still under that tsunami alert, such as,
you know, especially on the small portion of northern California.
[14:10:00]
But on the -- when it comes to Alaska and also the coastlines of Alaska and also Hawaii, they're still under tsunami warnings. But today is a -- it's a
beautiful day here in Santa Monica, next to the iconic and most visited places here, Santa Monica Pier. As you can see behind me, families have
decided to come to the beach, make the best out of it after this.
L.A. County sent out last night tsunami advisories, telling people not to come into the waters, stay away from the waters because as of 1:00 a.m. in
the morning, that's when the tsunami waves were supposed to come and reach the coastal areas here in southern California and into L.A. County.
Nevertheless, in Crescent City, there, authorities, local authorities there, they're in their morning meeting, have stated that luckily and
fortunately, there weren't any major damages as of right now, but they're still telling people to stay safe and not to come to the waters. Here in
the L.A., for example, the National Weather Service in L.A., it's also telling people that even though they're not under tsunami advisories or
warnings, they still should not be in the waters because the currents are still active.
And that could represent a serious -- a serious threat to their safety and their lives. Also, and that's -- as of right now also in California, the
state of California hasn't reported any major damages or casualties due to this tsunami advisories that are still in effect in certain regions. So,
right now, as of right now, the day is moving calmly here on the west coast areas here, at least in California and also in Oregon and Washington, as
the same thing with Alaska and Hawaii. Isa.
SOARES: It seems that some of the threats have been downgraded, safety, of course, is of paramount importance. Focus now turns to Central and South
America, we should keep an eye on that, appreciate it. Thank you very much indeed, Gonzalo. Thank you. And still to come, new calls for Hamas to
disarm and end its rule in Gaza.
It's part of an international effort to bring peace to the region through the creation of a Palestinian state. Plus, major disruption at U.K.
airports after air traffic control issues ground -- ground outbound flights, pardon me. We'll have all the details next.
(COMMERCIAL BREAK)
SOARES: Welcome back. With ceasefire talks on ice, Arab nations have signed on to a landmark declaration at a U.N. conference that calls for
Hamas to disarm and end its rule in Gaza. It is part of a diplomatic effort to end the war and pave the way for an independent Palestinian state.
[14:15:00]
Key negotiator Qatar, the Arab League and European Union and all among the signatories. The declaration calls for a ceasefire in Gaza and for the
Palestinian Authority to take power. Saudi Arabia, Jordan and other Arab nations are praising a tentative decision by Britain's Prime Minister to
recognize a Palestinian state. We brought you that story yesterday. Keir Starmer says that will happen in September unless Israel meets certain
conditions, and that includes a ceasefire in Gaza and no annexation of the West Bank.
Well, Israeli Prime Minister Benjamin Netanyahu says that decision rewards the, quote, "monstrous terrorism of Hamas". He says appeasement always
fails, adding it will not happen. And do make sure to join us tomorrow when we get some perspective from the Arab League assistant Secretary-General,
Ambassador Hossam Zaki will be joining us on the show, that is at 7:00 p.m. right here on CNN.
We are going to stay in the region. We're going to focus on Gaza because diplomats -- as diplomats debate Gaza's future, the death toll there grows
by the day, even by the hour. Gaza's Health Ministry says seven more people have died from starvation and malnutrition amid limited deliveries of
humanitarian aid.
It says thousands more people are on the edge, quote, "waiting in line for a slow, silent death." A U.N.-backed food security group warned yesterday
that famine is now unfolding in Gaza. And the World Food Program says nearly 40 percent of Gaza's population is going days at a time without
eating at all.
And despite Israel's easing of aid restrictions, people are still risking their lives trying to get food. The Health Ministry says at least 60 people
were killed in the last 24 hours while attempting to access aid. Two major Israeli human rights groups are now accusing their own country of genocide
in Gaza. The executive director of B'Tselem spoke in the last hour with my colleague Christiane Amanpour.
(BEGIN VIDEO CLIP)
YULI NOVAK, EXECUTIVE DIRECTOR, B'TSELEM: No genocide in history happened without their support either, by taking part or supporting it from afar, or
just turning a blind eye of the people of the group of the perpetrators. And unfortunately, and it is heartbreaking for me as an Israeli, this is
exactly what takes place now in Israel.
You asked about the reaction to our report, and I would say that 99 percent of Israelis didn't hear about our report, because part of what the Israeli
media is doing is completely deny Israeli public from knowing what's going on.
(END VIDEO CLIP)
SOARES: Well, Israel's government strongly rejects accusations of genocide, saying it only targets Hamas. But B'Tselem says Israel is acting
to systematically and deliberately, their words, destroy the entire Palestinian society. Jeremy Diamond has more on Gaza's humanitarian crisis
from Jerusalem for you.
(BEGIN VIDEOTAPE)
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (on camera): It certainly is not at a situation where this crisis has been alleviated or averted at
this point. I mean, we are seeing more trucks getting into Gaza yesterday, once again, for the second day in a row, we saw 200 trucks that were
distributed in Gaza, according to Israeli authorities.
That is certainly an uptick from where we were last week before Israel implemented those tactical pauses and created these safe corridors for
these aid delivery trucks. But it is nowhere near the 5 to 600 trucks a day that humanitarian aid officials have said are necessary in order to begin
to even -- to even begin to alleviate that humanitarian and starvation crisis that is currently unfolding in Gaza.
And so really, this is going to be a question of how long do the Israelis sustain this new effort and whether they also continue to increase it,
because it does need to be at a place where more than 200 trucks a day are getting into the Gaza Strip. And the United Nations is indeed warning that
time is running out to be able to mount this full-scale humanitarian response.
We are seeing the disturbing figures from inside of Gaza, 39 percent of people are now going days at a time without eating, according to the World
Food Program. We've seen child malnutrition rates spiking in Gaza, and once again, over the course of the last 24 hours, another nine -- sorry, seven
people, at least, have been -- have died as a result of malnutrition, according to the Palestinian Health Ministry. That brings us to a total of
154 people, including 89 children, who have died in Gaza as a result of starvation.
(END VIDEOTAPE)
SOARES: Our thanks to Jeremy Diamond for that. Well, meanwhile, U.S. special envoy Steve Witkoff will travel to Israel on Thursday, that is
according to a White House official and an Israeli source. Witkoff was expected to travel to the Middle East last week, if you remember, but
efforts for a ceasefire and hostage deal fell through.
[14:20:00]
Witkoff said Hamas showed an unwillingness to end the fighting, and said the U.S. would have to consider alternative options, were his words. I want
to turn our attention now to Moshe Lavi. He is the brother-in-law of hostage Omri Miran, who was kidnapped from his home in Israel during the
October the 7th attacks. Omri Miran is the father of two young girls, and his family has campaigned tirelessly for his release.
Moshe, welcome to the show or I should say, welcome back to the show, you and I have spoken before, but it's wonderful to have you back. And I
understand, Moshe, that today is a pretty tough day for you and your family. I think it's your niece's birthday, I was looking on your account
on X, and I think Ronnie(ph) is four years of age.
And yet again, as we look at, you know, your account on X and that beautiful photo, her father isn't home, yet again, another year, father
isn't home. You've been advocating for your brother-in-laws release since the war began. Just give us a sense of what are you hearing from the
Israeli authorities at this junction?
MOSHE LAVI, BROTHER-IN-LAW KIDNAPPED BY HAMAS: Thank you for having me again on the show. As you mentioned, it's Ronnie's(ph) fourth birthday, her
second birthday without her father my brother-in-law, Omri. It's a difficult day for my sister, for the entire family. But they're making sure
to mark and celebrate it, so Ronnie(ph) will cherish it in her memory as she grows up.
And we're also making sure that she understand that we are going to keep fighting so that her next -- by her next birthday and hopefully much
sooner, when we will be home and they'll be able to blow off the candles together. What we're hearing from policymakers in Israel, in the U.S., is
that Hamas is the problem, that Hamas has refused to engage in good faith yet again.
It prolonged the negotiations, even though Israel made the concessions expected of it. Even according to the mediators countries, including Hamas-
sponsor Qatar. And then, so we are now waiting for Hamas to understand that they cannot continue prolonging this war. And they cannot in a way, hold
hostage.
Both our family members, 50 hostages who are still remain captive by Hamas and also the people of Gaza, whose well-being they don't care --
SOARES: Yes --
LAVI: For.
SOARES: Yes, and look, I saw today that Israel's Heritage Minister, and this is according, by the way, Moshe, to "Times of Israel" and "Haaretz", I
think he did an interview, a radio interview today. He said the hostages -- and I'm quoting him here, by the way, the hostages should be defined as
prisoners of war, prisoners of war are only dealt with after victory. First, Hamas should be defeated." When you hear those words from an Israeli
Minister, what do you say to that?
LAVI: Yes, I've listened to that, to those statements. He's a minister from one of the most radical parties to ever be part of a government. And
sadly, there are radical elements in our government, and in our Knesset or parliament that are prioritizing objectives. Other objectives other than
bringing home the hostages and forgetting that, according to every poll since May 2024, or nearly every poll, at least 70 percent of the Israeli
public want to see the war ends with the return of the hostages.
It's more than an objective, a war objective, bringing them home. It's also intrinsic in our society, in our culture, in our Jewish tradition, to
redeem captives. And sadly, this minister, with the statement and other ministers have been betraying their trust, betraying their role as public
officials. And we keep emphasizing that to them.
I do trust that the majority of the government and the parliament are supporting a hostage deal, that's our understanding, and that's what we
hear, including from the Prime Minister. But we can't let those minister being emboldened, just like we can't let other radical elements in our
region, the Middle East, being emboldened --
SOARES: Yes --
LAVI: Including Hamas and their accomplices.
SOARES: And Moshe, we heard, I think it was from one of the U.S. officials, Steve Witkoff, in fact, I don't know if you heard us saying that
he's expected to travel to Israel, I think is on -- tomorrow, on Thursday. But he said, you know, while back when the whole thing broke off in terms
of the U.S. team, the withdrawal of the U.S. team from Doha, he said, we will now consider alternative options to bring the hostages home and to try
to create a more stable environment for the people of Gaza.
Do you know what he means by alternative options here? What more information, if any at all, are you getting from authorities?
LAVI: I will say first and foremost, I don't expect policymakers to share with us families such information about their plans, specific plans. But
what I do expect is that they will listen to us, meet us, and that's what they've been doing, including Ambassador Witkoff, who have been meeting and
speaking with families ever since he was appointed.
[14:25:00]
Last week, there was a delegation of families in Washington D.C., including my sister, Yishai(ph), who was there, and they heard from Secretary of
State Rubio that the U.S. is looking into other avenues, but those avenues, including try and find a different formula for an agreement. And perhaps,
we need to start emphasizing bridging agreements are not going to bring a resolution to the hostage crisis or to the humanitarian concerns in Gaza.
SOARES: Yes --
LAVI: What we do need now is an agreement that ends the war, bring home the hostages and allow Gaza rebuild, reconstitute without Hamas in power.
SOARES: And Moshe, you've been talking about the humanitarian situation. We have now been hearing of mounting evidence, really, of starvation. The
U.N.-backed food security agency warning of the worst-case scenario, you've heard of, sure in the last 24 hours of famine, President Trump himself has
said just this week, there's a real starvation stuff. I see it and you can't fake it.
Prime Minister Netanyahu says there's no starvation in Gaza. Your loved one is being brutally held by Hamas, 50 being held, 20 believed to be alive.
When you hear, you know, of these scenes of desperation, the fight for food, the hunger, I mean, what crosses your mind about what your brother-
in-law might be going through here?
LAVI: I want to emphasize that, like many other Israelis, I empathize with Gazans, non-combatants who are suffering from the continuation of this war.
I put the onus on Hamas for initiating October 7th, for creating a terror regime in the first place in Gaza, instead of building a true free society
since it took power first in 2006 elections, then in a coup in 2007.
But at the same time, we need to ensure that we -- that we prioritize -- both bring home the hostages and also alleviating the suffering in Gaza.
SOARES: Yes --
LAVI: What I do know about Omri's situation from other hostages who returned is that, they are facing starvation, that there have been -- the
hostages that have been abused, tortured, caged, deprived of daylight, water, sanitation, and that's my focus. I believe the --
SOARES: Yes --
LAVI: The key to end the war is to release all the hostages. In an ideal world, they would not have been --
SOARES: Yes --
LAVI: Taken in the first place, of course, but they would have been home long time ago without any concessions made by Israel. But we know we have
to negotiate, and that a deal is the only way to end the suffering for everyone involved, and see a new -- a new vision for this --
SOARES: Yes --
LAVI: Region.
SOARES: Moshe, I really appreciate you taking the time to speak to us. Please, wish Ronnie(ph) a very happy fourth birthday, and we hope, of
course, she gets to hold her father tightly at the next birthday party. Thank you very much, appreciate it.
LAVI: Amen --
SOARES: Now --
LAVI: Thank you.
SOARES: Thank you. Now, Amnesty International is calling for justice as well as accountability over the killing of a Palestinian human rights
activist in the West Bank. It is accusing Israel of failing to conduct real investigations into settler attacks, and says Odeh Hathalin's death is a
brutal reminder of the relentless violence faced by Palestinian communities.
Local officials in Masafer Yatta say Hathalin was shot and killed by a settler on Monday. Hathalin had worked on the Oscar-winning documentary "No
Other Land". Amnesty says he had recently warned British parliament members about threats to his life. Israeli forces say, quote, "terrorists had
hurled rocks towards Israeli civilians".
They say they arrested an Israeli for questioning. We will, of course, stay across this story. And still to come tonight, we are expecting to hear from
the chair of the U.S. Federal Reserve, Jay Powell, after that new interest rate decision. No -- rates were unchanged. Stock markets very much in the
green as expected. We'll bring you that.
Plus, U.S. Democrats are using an old procedure to force the release of the Jeffrey Epstein files. We'll look at whether it will work after the break.
(COMMERCIAL BREAK)
[14:30:00]
SOARES: Welcome back, everyone. While rates are holding steady, the U.S. economy is showing some serious signs of strength. The GDP jumped 3 percent
in the second quarter. That's far outpacing forecast. It also represents a sharp rise from first quarter figures.
On the heels of this new GDP data, U.S. President Donald Trump once again called for an interest rate cut to, as you can see there, no avail.
Meantime, Mr. Trump is ratcheting up the pressure on India to secure a trade deal with U.S. before Friday. The president is threatening a 25
percent tariff hike along with unspecified penalties for buying Russian oil.
Let's get more on all these strands as we keep an eye, of course, on Jay Powell who started to address, of course, the press. Jason Furman served as
top economic adviser during the Obama administration. He's currently a professor at Harvard University's Kennedy School of Government.
Jason, great to see you. We are listening. We are monitoring what Jay Powell is saying. We'll listen to the questions. I think that's the most
interesting point at right now. Fed holding rates unchanged. The fifth consecutive meeting, of course.
The interesting part from -- on my end, and I'm sure you are going to give me more detail here, is the fact there is now we're seeing dissent in these
votes. What did you make, first of all, of the decision to hold and the dissent that we are now seeing within the Federal Reserve?
JASON FURMAN, FORMER CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS AND PROFESSOR OF PRACTICE, HARVARD KENNEDY SCHOOL: So, it's great to be with
you. The decision to hold rates steady seems just about right to me. In the first half of this year, we've had slower economic growth that says cut
rates. We've also had faster inflation that says raise rates. The Fed is uncertain about all of it, and when you're uncertain, you wait, you collect
more data, you don't move.
As you said, two governors did dissent. As a general matter, I think it's healthy when there's dissent within a committee. I think it functions
better with difference and debate. I think it's totally reasonable to have thought you should cut rates by 25 basis points. It does sadden me a little
bit though that all the Biden appointees were on one side of the vote and all the Trump appointees were on the other. That's not the way the Fed has
historically worked. I wish it wasn't that way right now.
[14:35:00]
SOARES: Can you expand on that? I mean, it's interesting because one of those who actually dissented -- and I'm sure you might have more
information on this, one of the people that actually dissented is considered potentially one of the favorites to be the next Fed chair. How
politicized is this becoming in your view?
FURMAN: Look, Chris Waller is the person you're referring to. He's given some speeches recently that were, I think, very, very thoughtful in
articulating why he thought rates should be cut. His core argument is that the increase in inflation is transitory because it's the tariffs and that
will level out over time. I don't think that's at all a crazy view.
And by the way, he asked for 25-basis point cut. President Trump is out there asking for a 300-basis point cut. President Trump's view is, frankly,
in technical economic, speak nuts. That is not a view any respected person would have. Chris Waller is well within the normal range. So, it doesn't
bother me that much that he's advocating that.
SOARES: And of course, we'll wait to see what -- how Jay Powell, of course, answers some of these questions in particular over the dissent. But
there is a 64 probability, according to the CME watch tool of a 25-basis points reduction in September. Just, you know, why is the question that
I've was asking Richard Quest earlier in the show, why then, what numbers would they be looking for? What kind of clarity would they be looking for
here, Jason?
FURMAN: Right. So, there's two things that could drive a rate cut. One is that inflation eases. And so, they get more comfortable. The other is that
the real economy, probably the job market deteriorates, and so they get more nervous about the economy. I think if we get a rate cut, it's likely
to be that second path. It won't be because they're feeling good about where inflation is, it's because they're feeling nervous about what's
happening in the job market.
And I should say, by the way, I would bet against a September rate cut based on what we know right now. And I would also add, I don't think Jay
Powell knows what he's doing in September. He's going to be looking at the data. So, any signals anyone takes from today's press conference, they're
as likely to be misunderstanding him. I think he's going to be trying hard not to say anything.
SOARES: Jason, do stay with us. I want to go straight to Washington. Jay Powell speaking. Let's listen in.
JEROME POWELL, U.S. FEDERAL RESERVE CHAIR: In coming months, we'll receive a good amount of data that will help inform our assessment of the balance
of risks and the appropriate setting of the federal funds rate.
UNIDENTIFIED MALE: So, just to follow up. By coming months, does that include the possibility -- you'll be getting essentially two rounds of jobs
and inflation data between now and the September meeting? Is that potentially adequate to make a decision to lower rates at that point?
POWELL: So, you're right. We do have -- this is an intermeeting period when we'll get two full rounds of employment and inflation data before the
time of the September meeting. We have made no decisions about September. We don't do that in advance. We'll be taking that information into
consideration and all the other information we get as we make our decision at the September meeting.
UNIDENTIFIED MALE: Thank you, Mr. Chairman. You took out the word -- or the notion that uncertainty has diminished from this statement. Does that
mean uncertainty has increased? And I'm just wondering, the administration has struck several deals with large trading partners where it seems like we
now know what the rate is going to be. Does knowing that rate add to your certainty to change policy or do you need to wait to see the economic
effects?
POWELL: So, essentially, the statement in the -- in our statement about uncertainty reflects what's gone on since the last meeting. So, at the time
of the last meeting, uncertainty had moved down a little bit, but it was more or less even this time. So, we took out -- you know, had diminished
because it didn't diminish further. So, there's not really much in that. And then, your second question is, say again?
UNIDENTIFIED MALE: There have been several deals that have been struck, and now we seem to have an idea what the tariff rates are going to be with
some of our large trading partners. Does that not add to the kind of certainty you might need or is it you're waiting for the economic effects
to show themselves?
POWELL: No, I think we're still -- so, the -- you're right, it's been a very dynamic time for these trade negotiations. And lots and lots of events
in the intermeeting period. But we're still, you know, ways away from seeing where things settle down. We are clearly getting more and more
information and, you know, I think at this point, people's estimates, our estimates, outside estimates of the likely, you know, effective level of
tariffs is not moving around that much at this point.
But at the same time, there are many uncertainties left to resolve. So, yes, we are learning more and more. It doesn't feel like we're very close
to the end of that process, and that's not for us to judge. But it does -- it feels like there's much more to come, you know, as well. Looking ahead.
[14:40:00]
UNIDENTIFIED FEMALE: Neil.
UNIDENTIFIED MALE: Hi, Mr. Chairman. Neil Owen (ph) with Axios. This morning we got a GDP report in which final domestic private purchases
decelerate. Slowest pace since '22. There was a weakness in the interest sensitive sectors and residential investment commercial structures. Are
those not signs that monetary policy is a little too restrictive right now given current economic conditions?
POWELL: So, the, GDP and PDFP numbers came in pretty much right where we expected them to come in. You got to look at the whole picture. So,
certainly, as I mentioned in my opening remarks, economic activity data, GDP, private domestic, final purchases, which we think is a narrower but
better signal for future, for where the economy is going, has come down to a little better than 1 percent, 1.2 percent, I think in the case of GDP for
the first half, whereas it was 2.5 last year. So, that has certainly come down.
But if you look at the labor market, what you see is by many, many statistics, the labor market is kind of still in balance. It's things like
quits, you know, job openings and let alone the unemployment rate. They're all very -- by many measures, very similar to where they were a year ago.
So, you do not see weakening in the labor market.
You do see a slowing in job creation, but also in a slowing in the supply of workers. So, you've got a labor market that's in balance, albeit
partially because both demand and supply for workers has -- is coming down at the same pace, and that's why the unemployment rate has remained roughly
stable, which is why I said there we do see downside risk in the labor market.
I mean, our two mandate variables, right, are inflation and maximum employment, stable prices and maximum employment. Not so much growth. So,
the labor market looks solid. Inflation is above target. And even if you look through the tariff effects, we think it's still a bit above target,
and that's why our stance is where it is. But as I mentioned, you know, downside risks to the labor market are certainly apparent.
UNIDENTIFIED MALE: So, on labor -- given the fluid labor supply situations, there are a number for this jobs report we get on Friday that
would look to you like equilibrium job growth?
POWELL: You know, the main number you have to look at now is the unemployment rate, because you, if -- it's true that the, you know, demand
for workers in the form of, let's call it pay -- just say payroll jobs, that number has come down. But so has the breakeven number, kind of in
tandem.
So, you know, as long as the -- that puts the labor market in balance. The fact that it's getting into balance due to declines in both supply and
demand, though, I think does -- it is suggestive of downside risks. So, we're -- of course, we'll be watching that carefully.
COLBY SMITH, THE NEW YORK TIMES: Colby.
UNIDENTIFIED MALE: Thank you. Colby Smith with The New York Times. Two of your colleagues called for a quarter point cut today, and I'm wondering
what aspects of their argument were most compelling to you and how you're weighing their views against those on the committee who, as of the June
forecast, were in the camp of the Fed holding interest rate study for the remainder of the year? And just in terms of the June SEP, in particular, is
that still the best representation of where the court of the committee is?
POWELL: So, on the dissents, you know, what you want from everybody and also from a dissenter is a clear explanation for -- of what your thinking
is and what are the arguments you're making. And that's -- we had that today. So, I think, basically, this was quite a good meeting all around the
table, where people were -- you know, thought carefully about this and put their positions out there.
As I mentioned, you know, the -- sort of the majority of the committee was of the view that inflation's a bit above target. Maximum employment is at
target. That calls for modestly restrictive, in my way of thinking, modestly restrictive stance of policy for now. But we had two dissenters
who I think -- you know, you want that clear thinking and, you know, expression of your thinking. And we certainly had that today, I think all
around the table.
In terms of -- you asked about the June SEP. You know, I wouldn't -- that you're right. That's what it says and that may well -- I couldn't point to
it six weeks later --
SOARES: You've been listening there to Jay Powell. As you can see, decision was made in the last, what, 44 minutes, of course. Interest rates
hadn't remained unchanged. The fifth -- I mean, for the fifth consecutive meeting. He's been answering questions, we know, in the last 44 minutes or
so, that two -- there was dissent within the ranks of 12 members voting, two of them dissenting. And it's the first time, in fact, they have
dissented in 32 years. Jay Powell's being asked a question about the arguments that he found most compelling for the dissent.
[14:45:00]
He also spoke about -- may said that they not made a decision about September, about cuts in September. This -- even though we've heard from
President Trump today that he is -- that he wants to see rates change in September.
I was speaking to Jason Furman just before we were listening there to Jay Powell, keeping an eye also on the Dow Jones. And just turned on -- there
he is. He's still on the screen. It's just turned negative, but not dramatically. Jason, anything there that stood out to you? I mean, I heard
words that we've heard repeatedly, uncertainty has diminished, still many uncertainties, dynamic time, but clearly, the tariffs and the uncertainty
around these tariffs are key to the decision.
FURMAN: Yes, exactly. I mean, he, once again, didn't really tip his hand. He said, we're uncertain about what the policy is, even if some things have
gotten a little bit more locked in. They were uncertain about the consequences of that policy and that they're going to be looking at the
data over the next two meetings to make their decision in September.
I'd say the one thing that struck me is his tone about how the economy as a whole was doing was better than my own interpretation is. He was pretty
dismissive of the idea that growth is slowing, even though if you look at the first half of this year as a whole, you do see a market slowdown in
growth. So, if anything that says maybe the bar to him cutting rates will be a little bit higher than I might have previously thought.
SOARES: What did you make of how he answered that question from The New York Times journalist about the dissent within the Federal Reserve over the
rates cuts? I think he -- the question was, what was most compelling to you in terms of the arguments? What did you make of what he said there?
FURMAN: Look, the most important thing is he is an adult and he is managing a committee. He's being respectful to everyone in the committee.
He's talking about their substantive disagreements. And, you know, these choices are complicated. There should be substantive disagreements. So, the
most important thing I took away was just relief and gratitude that we have an adult running that organization at a time that is fraught and
complicated.
SOARES: Well, we'll see what happens. But he said we have made no decision about September that we have then -- by then two jobs reports and inflation
data. So, we will see if that data, as he said, does inform some of the risks in the coming months. Jason, appreciate it as always. Thank you very
much.
FURMAN: Thank you.
SOARES: And still to come tonight, a technical issue has grounded flights out of several U.K. airports. We'll have the latest update, next.
(COMMERCIAL BREAK)
[14:50:00]
SOARES: And this just into CNN, the U.S. is imposing sanctions against Brazilian Supreme Court justice, Alexandre de Moraes, for what it calls
serious human rights violations. President Donald Trump and members of his administration have accused Moraes of carrying out a political witch hunt
against former President Jair Bolsonaro. Bolsonaro is currently on trial of an alleged plot to overturn the results of the 2022 presidential election,
which he lost to President Luis Inacio Lula da Silva. Bolsonaro has denied wrongdoing.
We are also learning that President Trump has signed an executive order adding a 40 percent tariff on Brazil, bringing the total rate to 50 percent
with the White House sighting, quote, "a threat to the national security, foreign policy, and economy of the United States." Two stories are just
crossing. We're keeping our eyes on it, of course, and we'll get more reaction on both those strands from Brazil in the next hour right here with
my colleague Chrisy Macfarlane.
We have been seeing though today huge delays in airports across the U.K. after a major technical issue at an air traffic control center. The problem
impacted outgoing flights at Edinburgh, Newcastle, and London Gatwick Airports. Other U.K. airports have also been experiencing delays and
inbound flights were also -- were still able to land. The U.K. Air Traffic Services says the issue was fixed quickly and that they're working with
airports to minimize disruption.
I want to bring in aviation analyst and consultant Alex Macheras. Alex, I mean, this is, of course, for many people, as they would know, this is the
summer holiday getaway. A very busy time. Do we know exactly what happened, what the technical wishy was here?
ALEX MACHERAS, AVIATION ANALYST AND CONSULTANT: No further clarity yet on the technical issue. But it is the latest technical issue that the U.K.'s
National Air Traffic Service provider has suffered. Admittedly, today it was on a slightly smaller scale, and that's only because of the duration.
It was all over within an hour.
But those knock-on effects were instant, far and wide, because the airspace that had to ultimately be shut down was the London controlled area, the
London CTA. That's essentially the London part, the southern part of England's airspace that is responsible for handling all of the commercial
air traffic that is climbing out or descending towards key hubs like London Gatwick. But specifically, London, Heathrow, Europe's busiest. So, you can
imagine the delays that quickly started to rack up.
SOARES: And I'm guessing also the knock-on effect now, of course, for many passengers trying to get out on holiday, how long does it take to get
things -- how long is a piece of string, I suppose is the obvious question, but how long would it take to get things running normally here, Alex?
MACHERAS: Well, ultimately, passengers who are still yet to travel today, traveling this evening, local time across the U.K. are to expect delays.
Most aircraft, though, are getting airborne within a two, two-and-a-half- hour period of their original departure time. I have noticed that some of the evening, the late departures that were supposed to return back to the
U.K. later have been pushed to the morning because many of the U.K. airports have those curfews. So, it doesn't mean that they can simply rack
up at 2:00, 3:00 in the morning.
And this is where you actually see the vulnerability of U.K. air travel when we have this outage after outage, when we suffer these different
technical glitches that the National Air Traffic Service provider have unfortunately been known to have for so many years now. It's always peak
travel time. It tends to be always a bank holiday.
And the airline chiefs that I've spoken with this evening are saying that it's yet another example of how fragile everything is here, and that they
need that modernization. They need the overhaul that was promised all those years ago.
SOARES: Yes. And on that, I think that's a really important point. I mean, this is the end of July, a very busy time for travelers. We are seeing this
happening more frequently, as you say, Alex. What questions do you have then besides the need for modernization of the system here?
MACHERAS: Well, the U.K.'s airspace is perhaps one of the most complex. It is incredibly busy. We're talking about traffic, not just to and from the
U.K., but transit. And you've got massive hubs like London Heathrow, which last year was Europe's busiest.
The fact that we have the U.K.'s air traffic constantly shut down because of a single point of failure, be it with National Air Traffic Service
provider, NATS, and their outages, or the power station failure that we had not too long ago that put Heathrow into days' worth of disruption because,
again, of a single point of failure, it just adds to that worsening reputation on the world stage in global aviation that the U.K. need to get
this sorted.
[14:55:00]
The other countries, the other hubs are watching and are having to assist with diversions, with aircraft that are in the wrong place because of these
regular currencies. So, it is something that they need to fix.
SOARES: Alex Macheras, really appreciating. Thank you, Alex.
MACHERAS: Thank you.
SOARES: And finally, tonight, there's a good reason to stay up late this week. Make that, in fact, two reasons. A double meteor your shower will be
lighting up the overnight skies. The Alpha Capricornids and the Southern Delta Aquariids acquired are both occurring right now at the Southern
Hemisphere. It is the best place to watch both, but they'll be visible all over the world.
In the Southern Hemisphere, you may see 20 to 25 meteors per hour. In the Northern, you can expect 10 to 15 meteors per hour. The showers will be
visible through August 13th. Lucky for myself. And Christina Macfarlane is coming up next. Our kids wake up in the middle of the night. There you go.
Kill two birds with one stone.
That does it for us. Thanks for your company. Chrisy is up next with "What We Know."
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[15:00:00]
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