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Fed Raises Interest Rates; Military Cannot Confirm Maupin's Death; Army to Call up Reserves; Colin Powell Visits Sudan to Assess Crisis; Spacecraft to Enter Saturn's Orbit After 7-Year Trip
Aired June 30, 2004 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Borrowing money -- it's probably going to cost you in just a few minutes. The Fed expected to raise interest rates; what it means for your bottom line this hour.
FREDRICKA WHITFIELD, CNN ANCHOR: Saddam Hussein, he has been read his rights and is described as visibly shaken, and he's now in the legal custody of the people he's accused of terrorizing.
MILES O'BRIEN, CNN SPACE CORRESPONDENT: I'm Miles O'Brien, live at the Jet Propulsion Laboratory in Pasadena, California.
They're holding their breathe here. The $3 million Cassini spacecraft is honing in on the rings of Saturn and all it will take is a marble-sized piece of those rings to ruin everybody's night.
I'll have a live report.
PHILLIPS: And his "Fahrenheit 9/11" is hot at the box office, but Michael Moore leaves some people downright cold. He calls them "wacko attackos." We're going to talk to one author who laughs at that description.
From the CNN Center in Atlanta, I'm Kyra Phillips.
WHITFIELD: And I'm Fredricka Whitfield.
This hour of CNN's LIVE FROM begins right now.
Fifteen minutes and counting. From Wall Street to your street, and also to Pennsylvania Avenue, folks are holding their breath, even though they probably know what to expect.
The Federal Reserve is expected to announce its first interest rate increase in four years. This means it will cost more to borrow money, and some say it could be a sign of more increases to come.
Mary Snow of CNN Financial News is live from New York with more on that.
Still a lot of anticipation, Mary. Why?
MARY SNOW, CNN FINANCIAL CORRESPONDENT: Yes, Fredricka, the anticipation is just so high.
Some people describe it as the worst kept secret on Wall Street. Just about everyone and his brother expecting a quarter of a point percentage hike. But the anticipation is so high.
As you mentioned, the last time the Fed raised rates was four years ago and borrowing costs have been at their lowest levels since the late 1950s. Everyone knew it couldn't last, and there was a lot of speculation about when the Fed would move.
The Fed moving now because of the signs that the economy has been growing. More than a million jobs added in the last five months. Also, consecutive quarters of economic growth.
So the Fed is really tapping the brakes on the economy to cool it. The main concern here being inflation.
The anticipation, as we've been talking about, in recent weeks is really what the Fed will do I terms of its statement about how it will move forward for the rest of the year. And that statement will come with its announcement in just a few minutes.
WHITFIELD: And Mary, how quickly will people actually start feeling the effects of this possible rate hike?
SNOW: Well, you know, some -- the prospect of rising interest rates has really been trickling through both the market and the economy. Bonds, for instance. The bond market has been sending interest rates higher.
So let's say you recently applied for a 10-year mortgage. You've seen already the effects of the prospects of rising interest rates. Also car loans should be, in a couple of months, you can see the impact there.
Also, you know, the stock market has been anticipating higher interest rates, and that's why we've seen the market really has been little changed this year, compared to the rally that we've had last year because of the expectation of how this will all factor in.
WHITFIELD: And it's the first time in four years, but after this projected fate hike is expected, that yet another one might come before the year is out?
SNOW: Yes. Most economists at this point expect the Fed to continue to move throughout the year so that by the end of the year -- now the rate is at 1 percent -- they expect that rate to be at 2 percent.
In terms of how quickly the Fed will move, though, economists will be watching the statement to see how aggressive the Fed might be. The main key there is the word "measured."
If the Federal Reserve uses that in a statement they give in just a few minutes, see, that kind of gives an indication inflation is in check. And it will give economists a better idea of how fast the Fed will move.
WHITFIELD: All right, Mary Snow, thanks very much. We'll check back with you as we wait for the Fed's announcement on interest rates. And that's expected at 2:15 Eastern time. We'll let you know as soon as we know -- Kyra.
PHILLIPS: Our top international story now.
The changes in Iraq were visible in this country today. Baghdad's incoming ambassador to the United States hoisted the Iraqi flag in Washington last hour.
The ceremony marks a transition from Iraqi diplomatic offices in D.C. to a full-fledged embassy now that there's a new sovereign government in Baghdad.
Saddam Hussein is now legally in the hands of his own people to face justice. At some point he and 11 others from his regime will likely be tried by a war crimes tribunal.
Iraq's former strong man will take a step toward that early tomorrow U.S. time. He'll go before a court to be arraigned. Saddam is accused of having hundreds of thousands of people killed or tortured. Today Iraqis are having their say.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): He should be hanged not once but 20 times.
UNIDENTIFIED MALE (through translator): He doesn't deserve to face trial. Let him leave Iraq. That's good punishment for him.
MOUWAFFAK AL-RUBAIE, IRAQI NATIONAL SECURITY ADVISOR: We will try or level best to broadcast and to show this trial live on television everywhere in the world to see what Saddam has done to this country and what Saddam has done to neighboring countries. What Saddam has done to virtually every person, every individual in this country. And how Saddam has wasted a good opportunity for us to prosper, to develop, to progress like any other living nation.
(END VIDEO CLIP)
PHILLIPS: And you can stay with CNN throughout the night for special live coverage of Saddam Hussein's court appearance.
Elsewhere in Iraq today, a stark reminder that violence is not in the past. Insurgents fired mortars on a U.S. Army base near the Baghdad airport. Eleven American soldiers were wounded.
WHITFIELD: The U.S. Army has briefed the family of captured soldier Matt Maupin, saying it has no new information on his status. Militants claimed Monday in a videotape they had killed Maupin.
CNN's Keith Oppenheim is in Maupin's hometown of Union Township, Ohio, with the very latest -- Keith.
KEITH OPPENHEIM, CNN CORRESPONDENT: Hi, Fredricka.
Just prior to a news briefing that ended just a few minutes ago, there was a lot of formality, giving us a sense that perhaps something definitive would be said to us, but that's not the case. The status of specialist Matt Maupin remains very unclear.
At this briefing we had Brigadier General Michael Beasley as well as the U.S. Congressman Rob Portman. And they said they met with the family reassuring them that the Department of Defense is working on this case.
But that the videotape in this story, in which Matt Maupin may have been in or may not have been in is inconclusive, according to Defense Department experts.
We're going to hear a little bit right now from Brigadier General Michael Beasley, who spoke just minutes ago.
(BEGIN VIDEO CLIP)
BRIG. GEN. MICHAEL BEASLEY, U.S. ARMY: One, there is no bad information. There is no negative information with respect to Specialist Maupin that is known now.
We also are continuing full efforts in attempting to locate him and return him safely to his family.
(END VIDEO CLIP)
OPPENHEIM: So he's giving messages of reassurance.
Just to recap what's happened in this story. It was two days ago on Monday when the family learned of the existence of a videotape, a videotape that showed an execution.
Parts of that videotape were aired on the Al Jazeera Arab language network. The network did not actually air the execution itself but reported that militants had said that Matt Maupin was the person being shot in the head from behind on that tape.
The Army has not been able to substantiate that. They also indicated that, because there has been a transfer of power -- this is something they said today -- that the efforts to continue to find Matt Maupin will go on and will be unchanged.
And Fredericka, I'll note it's been 82 days since Matt Maupin was captured. His fuel convoy was attacked outside Baghdad. And his 21st birthday is in just a couple of weeks from now. So you can imagine if -- you can try, how difficult it must be for the family to wait and try to see if they can find out whether or not Matt Maupin is alive or dead.
Back to you.
WHITFIELD: Keith Oppenheim, thanks very much from Union Township, New Jersey -- Kyra.
PHILLIPS: The Army digging more deeply into its reserve pool. That will help maintain troop levels in Iraq and Afghanistan.
CNN Pentagon correspondent Barbara Starr now with the details. (BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): In the 1991 Persian Gulf War, the Army called up thousands of people to duty who never expected to hear from Uncle Sam.
UNIDENTIFIED FEMALE: How many of you don't want to be back here?
STARR: Now, 13 years later, because of the pressures of Iraq and a force stretched thin, it's happening again.
The Army shortly will begin notifying 5,600 members of the so- called individual ready reserve that they are headed to Iraq or Afghanistan later this year for up to 18 months of duty. And it's not voluntary.
This reserve force headed for the combat zone is made up of people who had left the military but still owe the Army some part of their eight-year service obligation.
Everyone is watching closely.
MAJ. GEN. ROBERT NESTER, RESERVE OFFICER ASSOCIATION (RET.): I think it's important to understand that they will take some special care and feeding, that they have some family support issues and things like that.
STARR: They will serve as truck drivers, engineers, military police and in other support jobs in National Guard and reserve units headed overseas.
Most of the troops are expected to come from California, Texas, New York, and Delaware.
The Army has used individuals from the reserve in recent years to fill particular jobs. But this deployment of such a large number indicates a long-term problem, experts say, in finding more troops to fill the rotation requirement overseas.
(on camera) Army officials say they know that people taken from their civilian lives and sent to Iraq or Afghanistan are going to be very unhappy, but they say they have no alternative given the requirement for troops in these combat zones.
Barbara Starr, CNN, the Pentagon.
(END VIDEOTAPE)
WHITFIELD: News across America now begins with the release of a convicted child killer in Pine City, New York.
Joe Steinberg left the central New York state prison today after serving 15 years for the beating death of his adopted daughter. The case captured national attention. The former lawyer is now expected to take a job on a local cable television program. Reclaiming airspace. Shock jock Howard Stern is branching out. His syndicated radio show is scheduled to air on nine new stations, five in markets where he was recently axed by Clear Channel Communications. Clear Channel dumped Stern in February after indecency complaints.
No amusement for Six Flags in Texas. Flooding forced the theme park in Arlington to close early yesterday. It's reopening today, but the rides may not be running. Heavy downpours have inundated north Texas for 17 days. More rain is expected today -- Kyra.
PHILLIPS: Now to Africa. Secretary of State Colin Powell is in Sudan. He's seeing firsthand conditions in the war-ravaged region. That's the site of what's being called one of the worst humanitarian crises in the world.
CNN's Jeff Koinange is there, too.
(BEGIN VIDEOTAPE)
JEFF KOINANGE, CNN CORRESPONDENT: A historic moment in western Sudan as U.S. Secretary of State Colin Powell, the highest ranking member of the U.S. government, on the ground in Darfur to assess for himself the extent of devastation and destruction in what experts are calling the worst humanitarian crisis looming in the region.
The U.S. Secretary of state Colin Powell arrived late Tuesday and met with government officials, here to apply a bit of muscle to rein in what's known as the Janjaweed militia, who have been going into village after village, raping and looting and pillaging and burning and killing black Africans.
Up to 30,000 in the last several months. Over a million fleeing across the border into Chad and two million threatened with hunger and starvation.
Now, he's not alone on the mission. He'll be joined by U.N. Secretary-General Kofi Annan.
On the ground in Khartoum, speaking with local officials before going on to Darfur and into Chad, where he's going to pressure officials there to make sure the refugees who have gone into the country will be safe before they return eventually to Darfur.
Later Wednesday the two top level diplomats will meet and exchange notes on Darfur before Secretary of State Colin Powell heads to the far east and U.N. Secretary-General Kofi Annan continues his mission to Sudan.
Western analysts say this is the moment for Sudan before the window shuts, and that it's time for the Sudanese government to either put up or shut up.
Jeff Koinange, CNN, Khartoum, Sudan.
(END VIDEOTAPE) WHITFIELD: Well it will apparently affect everything from your credit card to your savings accounts.
PHILLIPS: And in just a few minutes we expect the Fed to announce an interest rate change. We'll bring that to you live when it happens.
Also ahead, a womb with a view. An amazing new technology for parents to be, but it comes with some risks. Dr. Sanjay Gupta has that story.
And speaking of views, some never before seen images of Saturn expected soon, as an explorer moves into orbit. Miles O'Brien is all over it later on LIVE FROM.
(COMMERCIAL BREAK)
WHITFIELD: More now on our hour's top story: Wall Street and Main Street are waiting for the word of the Federal Reserve meeting in Washington. It's just minutes away before officials are expected to boost interest rates for the first time in 48 months.
What will it mean for your wallet? We turn to CNN financial news correspondent Mary Snow and, Mary, how will this message be conveyed when it happens at 2:15 about?
SNOW: Well, Fredricka, we'll get the statement at 2:15. Anticipation really at a fevered pitch everywhere, as you mentioned, on Wall Street, at Chicago, the Chicago Board of Trade, where bonds are traded. A lot of anticipation there.
The Fed will come out with a statement of its decision on what it will do with interest rates. And at this point we all know that it's widely anticipated that the interest rate hike will be about a quarter of 1 percent.
But, what everyone is really waiting to see is the statement that accompanies that decision, which will give economists a clue as to how the Fed will make its next moves.
Now, low borrowing costs have really paved the way for record levels of homeownership. So the rate hike could have a big impact on potential homebuyers, people looking for new homes.
(BEGIN VIDEOTAPE)
MICHAEL SHOV, DOUGLAS ELLIMAN: The other nice thing about this apartment is...
SNOW (voice-over): Tony Rivera has ramped up his search for a new home in recent weeks. Buying an apartment had been on his mind, but now he's pounding the pavement, mindful that the days of borrowing money on the cheap are numbered.
TONY RIVERA, POTENTIAL HOMEBUYER: This news about the interest rates going up, it just really made me get my butt off the bed and just really start looking.
SHOV: This is the pool. It's the pool level.
SNOW: Before Tony dives into the real estate market he's doing the math on the monthly borrowing costs. The apartment he's looking at allows for 90 percent financing. Those kind of deals that have made homeownership so accessible.
SHOV: Today we're in the trend that we see that people try to keep a certain monthly payment that they can afford. And they -- The first step they'll go from one vehicle to the other. They'll go from a fixed mortgage to an ARM.
SNOW: ARMs, or Adjustable Rate Mortgages, currently make up about 35 percent of new mortgage applications. Changes in borrowing cost depend on when the rate adjusts, which could be as frequently as every month.
MELISSA COHEN, PRESIDENT, MANHATTAN MORTGAGE: People who have short-term adjustable rate loans are probably in the worst position when the Fed begins to raise rates because those loans will go up the most quickly.
SNOW: How badly will it hurt? Fannie Mae estimates that the one-year adjustable will rise above five percent by year's end. That means a homeowner who recently took out a $200,000 loan on a one-year ARM will see a monthly payment of $926 balloon to $1,086, a 17 percent increase.
A big hike, but not enough to scare Tony Rivera from owning a home.
RIVERA: I can remember my parents paying over 15 to 18 percent on their mortgage. I mean, I -- it doesn't take a scientist to really know that these are historically really low interest rates.
(END VIDEOTAPE)
SNOW: Tony Rivera is going to keep on searching. Economists are going to keep a close eye on him and people like him to see if and when rising interest rates will cool the red-hot housing market.
And that decision expected any minute now -- Fredricka.
WHITFIELD: And Mary, as we wait for that decision to take place any moment now. If indeed, it is a rate hike, and even if it is a measured rate hike, how soon before people can start really start feeling the impact? Is it something like we'll start seeing tomorrow, the numbers will start to change, a month from now, weeks from now, what?
SNOW: Well, one of the good examples is a credit card. Let's say BankRate.com say half of the credit card holders have cards on a variable rate. So that you can see an impact in your next bill or perhaps in the next three months. New car loans, also, will see an impact there. The impact, though, overall is not expected to be huge. And while we point out in this piece what economists, also mortgage lenders, will tell you, is that while rates are going up, they still are at low levels, compared to other periods in history.
So right now, not a huge expectation in terms of knee-jerk reaction for a consumer.
And as we mentioned earlier, also, some people have already been feeling the effects, because fixed rate mortgages are tied to the bond market. And the bond market has been sending interest rates higher through the years. So people have already been seeing some of these effects filter through in their mortgage payments.
Also, there have been so many expectations of what may yet to come. On Wall Street, for instance, the impact of rising interest rates affects corporate profits. And Wall Street has been anticipating the rates to go up.
And that is why we're not seeing the kind of rally in the stock markets that we have in the past year that we saw.
One thing that this should provide, though, is some clarity. And when the Federal Reserve comes out with its statement, it will give an indication of how quickly it will move -- Fredricka.
WHITFIELD: Another familiar financial analyst with us all is Andy Serwer. He joins us as well in New York.
And you're keeping a close watch on things. And let's talk about those who perhaps are among that 35 percent of new loans out there who did get these adjustable rates.
How quickly do they need to make a move? If they just got their loans, do they really have much wiggle room right now?
ANDY SERWER, "FORTUNE" MAGAZINE: Well, I think they do, Fredricka. I mean, I think this is one of the few times in life where you really see something coming a long distance away...
WHITFIELD: All right. Andy, it looks -- it looks like we've got the numbers in right now.
SERWER: OK.
WHITFIELD: Raising it about a quarter at this point. Up to 1.25.
SERWER: Right.
WHITFIELD: Is that considered measured in your view?
SERWER: Absolutely.
WHITFIELD: I mean, we're looking for that accompanying language, as well.
SERWER: That's right. We'll be watching the language here in a second, but that's exactly what everyone expected. It's right down the middle of the fairway.
So it's not going to cause any surprise, any shock. It means the Federal Reserve sees the economy the way most people have anticipated, in that it is growing. We need to take the foot off of the accelerator.
It's not putting the brakes on, but it is taking the foot off the accelerator a little bit.
And getting back to your question, Fredricka about people refinancing. This is a situation where you really could see something coming. I was going to say it's like seeing a truck coming from miles and miles across the desert. You can see it coming so, you know, it's time to wise up.
If mean, if you're living close to the edge on an adjustable rate mortgage or an adjustable rate loan, you really should look to lock in now. Because it's not so much that rates went up just this tiny quarter after point. It's that we're at an inflection point, as they say, which means it's a change.
Rates could be trending up a lot here, a lot of people looking for several rate hikes this fall as Mary's been talking about. As we get towards the end of the year, rates could be, you know, a bit higher than they are now.
But still significantly low interest rates. Money is still cheap in America.
WHITFIELD: And Andy, while we all agree that consumers may not like the idea of interest rates going up, you say and other economists say this really is a great indicator of a strong economy, things are moving in the right direction?
SERWER: Yes, that's right. I mean rates wouldn't be moving up. The Fed wouldn't be taking the foot off the gas if it didn't see the economy expanding.
The recovery is still fragile right now, Fredricka. And that's why we're not seeing a half point rise. There's uncertainty internationally, obviously. The election is at hand. That's more uncertainty here.
But what this means is the economy is expanding and growing. And, yes, you're going to be paying a little bit more for money when you borrow, but that should mean that maybe someone in your family has gotten a job again recently. Or maybe you're going to be getting a raise or have gotten a raise.
So it should be that the rising tide helps you out in this situation when rates are going up.
WHITFIELD: Andy Serwer and Mary Snow, thanks very much.
Once again, for the first time in four years, federal interest rates now going up a quarter. This now just coming in from the federal government. That's the increase to now 1.25 percent -- Kyra.
PHILLIPS: And with the first interest rate hike in four years, a quick look at the numbers here, live from Wall Street. There you have it. There's the numbers.
Also straight ahead, expect some spectacular sights from the moons of Saturn. A flight of fancy for some, out of this world pictures of the ringed planet. Miles O'Brien so excited about it. He's up next live.
And Brando broke? Apparently the Oscar winning actor has millions of reasons to hide his Oscars.
(COMMERCIAL BREAK)
PHILLIPS: A delicious smorgasbord of opportunities. That's how scientists see Cassini's mission to Saturn.
After a seven-year commute, the international spacecraft is prepping for a four-year tour of the giant planet and some of its moons. Project scientists are full of excitement in Europe and at NASA's jet propulsion lab in Pasadena, California.
And of course that's where we find our Miles O'Brien, just as excited as all the other scientists.
Hi, Miles.
O'BRIEN: Kyra, you're excited too. Admit it.
PHILLIPS: I always get excited about your space segments. Come one.
O'BRIEN: Yes you are, and Saturn is your favorite planet, I know that. Right?
PHILLIPS: I think it's Venus. Isn't that where men are from or women are from?
O'BRIEN: That's right, yes.
PHILLIPS: Come on now.
O'BRIEN: Men are from Mars. I don't know who's from Saturn.
In any case, arguably the coolest planet in the solar system -- I think a lot of people would agree -- Saturn is the focus of attention here at the jet propulsion lab.
You know, we were here for so long talking about Mars. We're shifting gears now, focusing on the sixth planet from the sun. The $3 billion Cassini spacecraft, it would weigh six tons if it was standing here right now. By far the largest, most complex, you name it, all the superlatives, spacecraft ever sent out to probe the solar system is homing in on the ringed planet.
Now this animation doesn't do it justice. Speed right now is approaching 50 to 60,000 miles an hour; 50 to 60,000 miles an hour. And of course, we don't know what the speed limit is on Saturn. So we suppose that's okay.
In any case it is headed directly for the rings of Saturn. In order to enter the orbit -- it's on a four-year mission, orbiting Saturn and some of its 31 known moons. Who knows, it might find a few others. It has to fly through the gap in those rings, one of the gaps, twice.
Here's a diagram that shows you how it works. Goes up through the ring, that red portion in the middle of the screen there is when the rocket motors are burning for about 90 minutes or so, and then back down through.
It's not that scientists necessarily wanted to do this rather perilous mission. It's just that this is the only way to enter into Saturn's orbit. So risky times here.
And we had a briefing a few moments ago. We heard from the program manager, who kind of put this all in perspective.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You don't expect there to be any debris, any material in this region that is larger than dust grains.
How big of a particle hit it could take? I really don't know. Something the size of a marble, something the size of a pea, would do a lot of damage.
(END VIDEO CLIP)
O'BRIEN: Something the size of a marble, something the size of a pea could cause a lot of damage. That puts this all in perspective.
Kevin Grazier is here. He's one of the main scientists, the investigating scientists on the Cassini probe.
You see the model behind us. That's a representation of some of the gear he's been involved in.
When you hear that, that something the size of a marble, which clearly you can't see here from Earth, could ruin your day. That's got to be -- the tension level's got to be pretty high here.
KEVIN GRAZIER, CASSINI SCIENTIST: We are excited and we're a little nervous. We've been imaging this area of the ring system for a while. We're fairly certain it's devoid of particles. But still, you can't not be nervous. O'BRIEN: Yes, all right. Well, we'll be watching. There's going to be some gaps in the coverage all throughout it. You'll be holding your breath, hoping to hear back.
But I understand it, there's a storm in Australia, a windstorm, which might make it actually hard to hear back from the spacecraft, as if you needed this.
GRAZIER: That's right. It adds to the tension a little bit. We have an antenna complex in Australia. We actually maintain three antenna complexes around the planet, about 120 degrees apart, so there's always one antenna facing your spacecraft.
The one facing Cassini right now is having a wind problem, wind storm. If it gets to a certain velocity we will have to still the antenna and won't hear back from the spacecraft as early as we would like.
O'BRIEN: OK. They'll be biting their nails to the quick if that happens. As we say, just adds a little bit to the drama here as Cassini, after nearly a seven-year voyage, enters into the orbit of Saturn. Hopefully, all will go well.
Kevin Grazier will be with us all throughout the evening. We'll be here all throughout the evening, giving you live reports. And as they come in, beginning tomorrow morning Eastern Time, extraordinary, we hope, images of the rings. Whether they're extraordinary or not, they certainly will be the closest pictures ever taken of Saturn's rings -- Kyra.
PHILLIPS: All right.
O'BRIEN: I'm sorry. We're going to break.
PHILLIPS: It's OK. I'm fascinated.
O'BRIEN: Kyra, I'm so glad you're involved.
PHILLIPS: That's a little inside joke Miles and I have.
Let's do it. Let's take Saturn and you and me and ring ourselves to break.
O'BRIEN: There we go.
(COMMERCIAL BREAK)
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Aired June 30, 2004 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Borrowing money -- it's probably going to cost you in just a few minutes. The Fed expected to raise interest rates; what it means for your bottom line this hour.
FREDRICKA WHITFIELD, CNN ANCHOR: Saddam Hussein, he has been read his rights and is described as visibly shaken, and he's now in the legal custody of the people he's accused of terrorizing.
MILES O'BRIEN, CNN SPACE CORRESPONDENT: I'm Miles O'Brien, live at the Jet Propulsion Laboratory in Pasadena, California.
They're holding their breathe here. The $3 million Cassini spacecraft is honing in on the rings of Saturn and all it will take is a marble-sized piece of those rings to ruin everybody's night.
I'll have a live report.
PHILLIPS: And his "Fahrenheit 9/11" is hot at the box office, but Michael Moore leaves some people downright cold. He calls them "wacko attackos." We're going to talk to one author who laughs at that description.
From the CNN Center in Atlanta, I'm Kyra Phillips.
WHITFIELD: And I'm Fredricka Whitfield.
This hour of CNN's LIVE FROM begins right now.
Fifteen minutes and counting. From Wall Street to your street, and also to Pennsylvania Avenue, folks are holding their breath, even though they probably know what to expect.
The Federal Reserve is expected to announce its first interest rate increase in four years. This means it will cost more to borrow money, and some say it could be a sign of more increases to come.
Mary Snow of CNN Financial News is live from New York with more on that.
Still a lot of anticipation, Mary. Why?
MARY SNOW, CNN FINANCIAL CORRESPONDENT: Yes, Fredricka, the anticipation is just so high.
Some people describe it as the worst kept secret on Wall Street. Just about everyone and his brother expecting a quarter of a point percentage hike. But the anticipation is so high.
As you mentioned, the last time the Fed raised rates was four years ago and borrowing costs have been at their lowest levels since the late 1950s. Everyone knew it couldn't last, and there was a lot of speculation about when the Fed would move.
The Fed moving now because of the signs that the economy has been growing. More than a million jobs added in the last five months. Also, consecutive quarters of economic growth.
So the Fed is really tapping the brakes on the economy to cool it. The main concern here being inflation.
The anticipation, as we've been talking about, in recent weeks is really what the Fed will do I terms of its statement about how it will move forward for the rest of the year. And that statement will come with its announcement in just a few minutes.
WHITFIELD: And Mary, how quickly will people actually start feeling the effects of this possible rate hike?
SNOW: Well, you know, some -- the prospect of rising interest rates has really been trickling through both the market and the economy. Bonds, for instance. The bond market has been sending interest rates higher.
So let's say you recently applied for a 10-year mortgage. You've seen already the effects of the prospects of rising interest rates. Also car loans should be, in a couple of months, you can see the impact there.
Also, you know, the stock market has been anticipating higher interest rates, and that's why we've seen the market really has been little changed this year, compared to the rally that we've had last year because of the expectation of how this will all factor in.
WHITFIELD: And it's the first time in four years, but after this projected fate hike is expected, that yet another one might come before the year is out?
SNOW: Yes. Most economists at this point expect the Fed to continue to move throughout the year so that by the end of the year -- now the rate is at 1 percent -- they expect that rate to be at 2 percent.
In terms of how quickly the Fed will move, though, economists will be watching the statement to see how aggressive the Fed might be. The main key there is the word "measured."
If the Federal Reserve uses that in a statement they give in just a few minutes, see, that kind of gives an indication inflation is in check. And it will give economists a better idea of how fast the Fed will move.
WHITFIELD: All right, Mary Snow, thanks very much. We'll check back with you as we wait for the Fed's announcement on interest rates. And that's expected at 2:15 Eastern time. We'll let you know as soon as we know -- Kyra.
PHILLIPS: Our top international story now.
The changes in Iraq were visible in this country today. Baghdad's incoming ambassador to the United States hoisted the Iraqi flag in Washington last hour.
The ceremony marks a transition from Iraqi diplomatic offices in D.C. to a full-fledged embassy now that there's a new sovereign government in Baghdad.
Saddam Hussein is now legally in the hands of his own people to face justice. At some point he and 11 others from his regime will likely be tried by a war crimes tribunal.
Iraq's former strong man will take a step toward that early tomorrow U.S. time. He'll go before a court to be arraigned. Saddam is accused of having hundreds of thousands of people killed or tortured. Today Iraqis are having their say.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): He should be hanged not once but 20 times.
UNIDENTIFIED MALE (through translator): He doesn't deserve to face trial. Let him leave Iraq. That's good punishment for him.
MOUWAFFAK AL-RUBAIE, IRAQI NATIONAL SECURITY ADVISOR: We will try or level best to broadcast and to show this trial live on television everywhere in the world to see what Saddam has done to this country and what Saddam has done to neighboring countries. What Saddam has done to virtually every person, every individual in this country. And how Saddam has wasted a good opportunity for us to prosper, to develop, to progress like any other living nation.
(END VIDEO CLIP)
PHILLIPS: And you can stay with CNN throughout the night for special live coverage of Saddam Hussein's court appearance.
Elsewhere in Iraq today, a stark reminder that violence is not in the past. Insurgents fired mortars on a U.S. Army base near the Baghdad airport. Eleven American soldiers were wounded.
WHITFIELD: The U.S. Army has briefed the family of captured soldier Matt Maupin, saying it has no new information on his status. Militants claimed Monday in a videotape they had killed Maupin.
CNN's Keith Oppenheim is in Maupin's hometown of Union Township, Ohio, with the very latest -- Keith.
KEITH OPPENHEIM, CNN CORRESPONDENT: Hi, Fredricka.
Just prior to a news briefing that ended just a few minutes ago, there was a lot of formality, giving us a sense that perhaps something definitive would be said to us, but that's not the case. The status of specialist Matt Maupin remains very unclear.
At this briefing we had Brigadier General Michael Beasley as well as the U.S. Congressman Rob Portman. And they said they met with the family reassuring them that the Department of Defense is working on this case.
But that the videotape in this story, in which Matt Maupin may have been in or may not have been in is inconclusive, according to Defense Department experts.
We're going to hear a little bit right now from Brigadier General Michael Beasley, who spoke just minutes ago.
(BEGIN VIDEO CLIP)
BRIG. GEN. MICHAEL BEASLEY, U.S. ARMY: One, there is no bad information. There is no negative information with respect to Specialist Maupin that is known now.
We also are continuing full efforts in attempting to locate him and return him safely to his family.
(END VIDEO CLIP)
OPPENHEIM: So he's giving messages of reassurance.
Just to recap what's happened in this story. It was two days ago on Monday when the family learned of the existence of a videotape, a videotape that showed an execution.
Parts of that videotape were aired on the Al Jazeera Arab language network. The network did not actually air the execution itself but reported that militants had said that Matt Maupin was the person being shot in the head from behind on that tape.
The Army has not been able to substantiate that. They also indicated that, because there has been a transfer of power -- this is something they said today -- that the efforts to continue to find Matt Maupin will go on and will be unchanged.
And Fredericka, I'll note it's been 82 days since Matt Maupin was captured. His fuel convoy was attacked outside Baghdad. And his 21st birthday is in just a couple of weeks from now. So you can imagine if -- you can try, how difficult it must be for the family to wait and try to see if they can find out whether or not Matt Maupin is alive or dead.
Back to you.
WHITFIELD: Keith Oppenheim, thanks very much from Union Township, New Jersey -- Kyra.
PHILLIPS: The Army digging more deeply into its reserve pool. That will help maintain troop levels in Iraq and Afghanistan.
CNN Pentagon correspondent Barbara Starr now with the details. (BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): In the 1991 Persian Gulf War, the Army called up thousands of people to duty who never expected to hear from Uncle Sam.
UNIDENTIFIED FEMALE: How many of you don't want to be back here?
STARR: Now, 13 years later, because of the pressures of Iraq and a force stretched thin, it's happening again.
The Army shortly will begin notifying 5,600 members of the so- called individual ready reserve that they are headed to Iraq or Afghanistan later this year for up to 18 months of duty. And it's not voluntary.
This reserve force headed for the combat zone is made up of people who had left the military but still owe the Army some part of their eight-year service obligation.
Everyone is watching closely.
MAJ. GEN. ROBERT NESTER, RESERVE OFFICER ASSOCIATION (RET.): I think it's important to understand that they will take some special care and feeding, that they have some family support issues and things like that.
STARR: They will serve as truck drivers, engineers, military police and in other support jobs in National Guard and reserve units headed overseas.
Most of the troops are expected to come from California, Texas, New York, and Delaware.
The Army has used individuals from the reserve in recent years to fill particular jobs. But this deployment of such a large number indicates a long-term problem, experts say, in finding more troops to fill the rotation requirement overseas.
(on camera) Army officials say they know that people taken from their civilian lives and sent to Iraq or Afghanistan are going to be very unhappy, but they say they have no alternative given the requirement for troops in these combat zones.
Barbara Starr, CNN, the Pentagon.
(END VIDEOTAPE)
WHITFIELD: News across America now begins with the release of a convicted child killer in Pine City, New York.
Joe Steinberg left the central New York state prison today after serving 15 years for the beating death of his adopted daughter. The case captured national attention. The former lawyer is now expected to take a job on a local cable television program. Reclaiming airspace. Shock jock Howard Stern is branching out. His syndicated radio show is scheduled to air on nine new stations, five in markets where he was recently axed by Clear Channel Communications. Clear Channel dumped Stern in February after indecency complaints.
No amusement for Six Flags in Texas. Flooding forced the theme park in Arlington to close early yesterday. It's reopening today, but the rides may not be running. Heavy downpours have inundated north Texas for 17 days. More rain is expected today -- Kyra.
PHILLIPS: Now to Africa. Secretary of State Colin Powell is in Sudan. He's seeing firsthand conditions in the war-ravaged region. That's the site of what's being called one of the worst humanitarian crises in the world.
CNN's Jeff Koinange is there, too.
(BEGIN VIDEOTAPE)
JEFF KOINANGE, CNN CORRESPONDENT: A historic moment in western Sudan as U.S. Secretary of State Colin Powell, the highest ranking member of the U.S. government, on the ground in Darfur to assess for himself the extent of devastation and destruction in what experts are calling the worst humanitarian crisis looming in the region.
The U.S. Secretary of state Colin Powell arrived late Tuesday and met with government officials, here to apply a bit of muscle to rein in what's known as the Janjaweed militia, who have been going into village after village, raping and looting and pillaging and burning and killing black Africans.
Up to 30,000 in the last several months. Over a million fleeing across the border into Chad and two million threatened with hunger and starvation.
Now, he's not alone on the mission. He'll be joined by U.N. Secretary-General Kofi Annan.
On the ground in Khartoum, speaking with local officials before going on to Darfur and into Chad, where he's going to pressure officials there to make sure the refugees who have gone into the country will be safe before they return eventually to Darfur.
Later Wednesday the two top level diplomats will meet and exchange notes on Darfur before Secretary of State Colin Powell heads to the far east and U.N. Secretary-General Kofi Annan continues his mission to Sudan.
Western analysts say this is the moment for Sudan before the window shuts, and that it's time for the Sudanese government to either put up or shut up.
Jeff Koinange, CNN, Khartoum, Sudan.
(END VIDEOTAPE) WHITFIELD: Well it will apparently affect everything from your credit card to your savings accounts.
PHILLIPS: And in just a few minutes we expect the Fed to announce an interest rate change. We'll bring that to you live when it happens.
Also ahead, a womb with a view. An amazing new technology for parents to be, but it comes with some risks. Dr. Sanjay Gupta has that story.
And speaking of views, some never before seen images of Saturn expected soon, as an explorer moves into orbit. Miles O'Brien is all over it later on LIVE FROM.
(COMMERCIAL BREAK)
WHITFIELD: More now on our hour's top story: Wall Street and Main Street are waiting for the word of the Federal Reserve meeting in Washington. It's just minutes away before officials are expected to boost interest rates for the first time in 48 months.
What will it mean for your wallet? We turn to CNN financial news correspondent Mary Snow and, Mary, how will this message be conveyed when it happens at 2:15 about?
SNOW: Well, Fredricka, we'll get the statement at 2:15. Anticipation really at a fevered pitch everywhere, as you mentioned, on Wall Street, at Chicago, the Chicago Board of Trade, where bonds are traded. A lot of anticipation there.
The Fed will come out with a statement of its decision on what it will do with interest rates. And at this point we all know that it's widely anticipated that the interest rate hike will be about a quarter of 1 percent.
But, what everyone is really waiting to see is the statement that accompanies that decision, which will give economists a clue as to how the Fed will make its next moves.
Now, low borrowing costs have really paved the way for record levels of homeownership. So the rate hike could have a big impact on potential homebuyers, people looking for new homes.
(BEGIN VIDEOTAPE)
MICHAEL SHOV, DOUGLAS ELLIMAN: The other nice thing about this apartment is...
SNOW (voice-over): Tony Rivera has ramped up his search for a new home in recent weeks. Buying an apartment had been on his mind, but now he's pounding the pavement, mindful that the days of borrowing money on the cheap are numbered.
TONY RIVERA, POTENTIAL HOMEBUYER: This news about the interest rates going up, it just really made me get my butt off the bed and just really start looking.
SHOV: This is the pool. It's the pool level.
SNOW: Before Tony dives into the real estate market he's doing the math on the monthly borrowing costs. The apartment he's looking at allows for 90 percent financing. Those kind of deals that have made homeownership so accessible.
SHOV: Today we're in the trend that we see that people try to keep a certain monthly payment that they can afford. And they -- The first step they'll go from one vehicle to the other. They'll go from a fixed mortgage to an ARM.
SNOW: ARMs, or Adjustable Rate Mortgages, currently make up about 35 percent of new mortgage applications. Changes in borrowing cost depend on when the rate adjusts, which could be as frequently as every month.
MELISSA COHEN, PRESIDENT, MANHATTAN MORTGAGE: People who have short-term adjustable rate loans are probably in the worst position when the Fed begins to raise rates because those loans will go up the most quickly.
SNOW: How badly will it hurt? Fannie Mae estimates that the one-year adjustable will rise above five percent by year's end. That means a homeowner who recently took out a $200,000 loan on a one-year ARM will see a monthly payment of $926 balloon to $1,086, a 17 percent increase.
A big hike, but not enough to scare Tony Rivera from owning a home.
RIVERA: I can remember my parents paying over 15 to 18 percent on their mortgage. I mean, I -- it doesn't take a scientist to really know that these are historically really low interest rates.
(END VIDEOTAPE)
SNOW: Tony Rivera is going to keep on searching. Economists are going to keep a close eye on him and people like him to see if and when rising interest rates will cool the red-hot housing market.
And that decision expected any minute now -- Fredricka.
WHITFIELD: And Mary, as we wait for that decision to take place any moment now. If indeed, it is a rate hike, and even if it is a measured rate hike, how soon before people can start really start feeling the impact? Is it something like we'll start seeing tomorrow, the numbers will start to change, a month from now, weeks from now, what?
SNOW: Well, one of the good examples is a credit card. Let's say BankRate.com say half of the credit card holders have cards on a variable rate. So that you can see an impact in your next bill or perhaps in the next three months. New car loans, also, will see an impact there. The impact, though, overall is not expected to be huge. And while we point out in this piece what economists, also mortgage lenders, will tell you, is that while rates are going up, they still are at low levels, compared to other periods in history.
So right now, not a huge expectation in terms of knee-jerk reaction for a consumer.
And as we mentioned earlier, also, some people have already been feeling the effects, because fixed rate mortgages are tied to the bond market. And the bond market has been sending interest rates higher through the years. So people have already been seeing some of these effects filter through in their mortgage payments.
Also, there have been so many expectations of what may yet to come. On Wall Street, for instance, the impact of rising interest rates affects corporate profits. And Wall Street has been anticipating the rates to go up.
And that is why we're not seeing the kind of rally in the stock markets that we have in the past year that we saw.
One thing that this should provide, though, is some clarity. And when the Federal Reserve comes out with its statement, it will give an indication of how quickly it will move -- Fredricka.
WHITFIELD: Another familiar financial analyst with us all is Andy Serwer. He joins us as well in New York.
And you're keeping a close watch on things. And let's talk about those who perhaps are among that 35 percent of new loans out there who did get these adjustable rates.
How quickly do they need to make a move? If they just got their loans, do they really have much wiggle room right now?
ANDY SERWER, "FORTUNE" MAGAZINE: Well, I think they do, Fredricka. I mean, I think this is one of the few times in life where you really see something coming a long distance away...
WHITFIELD: All right. Andy, it looks -- it looks like we've got the numbers in right now.
SERWER: OK.
WHITFIELD: Raising it about a quarter at this point. Up to 1.25.
SERWER: Right.
WHITFIELD: Is that considered measured in your view?
SERWER: Absolutely.
WHITFIELD: I mean, we're looking for that accompanying language, as well.
SERWER: That's right. We'll be watching the language here in a second, but that's exactly what everyone expected. It's right down the middle of the fairway.
So it's not going to cause any surprise, any shock. It means the Federal Reserve sees the economy the way most people have anticipated, in that it is growing. We need to take the foot off of the accelerator.
It's not putting the brakes on, but it is taking the foot off the accelerator a little bit.
And getting back to your question, Fredricka about people refinancing. This is a situation where you really could see something coming. I was going to say it's like seeing a truck coming from miles and miles across the desert. You can see it coming so, you know, it's time to wise up.
If mean, if you're living close to the edge on an adjustable rate mortgage or an adjustable rate loan, you really should look to lock in now. Because it's not so much that rates went up just this tiny quarter after point. It's that we're at an inflection point, as they say, which means it's a change.
Rates could be trending up a lot here, a lot of people looking for several rate hikes this fall as Mary's been talking about. As we get towards the end of the year, rates could be, you know, a bit higher than they are now.
But still significantly low interest rates. Money is still cheap in America.
WHITFIELD: And Andy, while we all agree that consumers may not like the idea of interest rates going up, you say and other economists say this really is a great indicator of a strong economy, things are moving in the right direction?
SERWER: Yes, that's right. I mean rates wouldn't be moving up. The Fed wouldn't be taking the foot off the gas if it didn't see the economy expanding.
The recovery is still fragile right now, Fredricka. And that's why we're not seeing a half point rise. There's uncertainty internationally, obviously. The election is at hand. That's more uncertainty here.
But what this means is the economy is expanding and growing. And, yes, you're going to be paying a little bit more for money when you borrow, but that should mean that maybe someone in your family has gotten a job again recently. Or maybe you're going to be getting a raise or have gotten a raise.
So it should be that the rising tide helps you out in this situation when rates are going up.
WHITFIELD: Andy Serwer and Mary Snow, thanks very much.
Once again, for the first time in four years, federal interest rates now going up a quarter. This now just coming in from the federal government. That's the increase to now 1.25 percent -- Kyra.
PHILLIPS: And with the first interest rate hike in four years, a quick look at the numbers here, live from Wall Street. There you have it. There's the numbers.
Also straight ahead, expect some spectacular sights from the moons of Saturn. A flight of fancy for some, out of this world pictures of the ringed planet. Miles O'Brien so excited about it. He's up next live.
And Brando broke? Apparently the Oscar winning actor has millions of reasons to hide his Oscars.
(COMMERCIAL BREAK)
PHILLIPS: A delicious smorgasbord of opportunities. That's how scientists see Cassini's mission to Saturn.
After a seven-year commute, the international spacecraft is prepping for a four-year tour of the giant planet and some of its moons. Project scientists are full of excitement in Europe and at NASA's jet propulsion lab in Pasadena, California.
And of course that's where we find our Miles O'Brien, just as excited as all the other scientists.
Hi, Miles.
O'BRIEN: Kyra, you're excited too. Admit it.
PHILLIPS: I always get excited about your space segments. Come one.
O'BRIEN: Yes you are, and Saturn is your favorite planet, I know that. Right?
PHILLIPS: I think it's Venus. Isn't that where men are from or women are from?
O'BRIEN: That's right, yes.
PHILLIPS: Come on now.
O'BRIEN: Men are from Mars. I don't know who's from Saturn.
In any case, arguably the coolest planet in the solar system -- I think a lot of people would agree -- Saturn is the focus of attention here at the jet propulsion lab.
You know, we were here for so long talking about Mars. We're shifting gears now, focusing on the sixth planet from the sun. The $3 billion Cassini spacecraft, it would weigh six tons if it was standing here right now. By far the largest, most complex, you name it, all the superlatives, spacecraft ever sent out to probe the solar system is homing in on the ringed planet.
Now this animation doesn't do it justice. Speed right now is approaching 50 to 60,000 miles an hour; 50 to 60,000 miles an hour. And of course, we don't know what the speed limit is on Saturn. So we suppose that's okay.
In any case it is headed directly for the rings of Saturn. In order to enter the orbit -- it's on a four-year mission, orbiting Saturn and some of its 31 known moons. Who knows, it might find a few others. It has to fly through the gap in those rings, one of the gaps, twice.
Here's a diagram that shows you how it works. Goes up through the ring, that red portion in the middle of the screen there is when the rocket motors are burning for about 90 minutes or so, and then back down through.
It's not that scientists necessarily wanted to do this rather perilous mission. It's just that this is the only way to enter into Saturn's orbit. So risky times here.
And we had a briefing a few moments ago. We heard from the program manager, who kind of put this all in perspective.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You don't expect there to be any debris, any material in this region that is larger than dust grains.
How big of a particle hit it could take? I really don't know. Something the size of a marble, something the size of a pea, would do a lot of damage.
(END VIDEO CLIP)
O'BRIEN: Something the size of a marble, something the size of a pea could cause a lot of damage. That puts this all in perspective.
Kevin Grazier is here. He's one of the main scientists, the investigating scientists on the Cassini probe.
You see the model behind us. That's a representation of some of the gear he's been involved in.
When you hear that, that something the size of a marble, which clearly you can't see here from Earth, could ruin your day. That's got to be -- the tension level's got to be pretty high here.
KEVIN GRAZIER, CASSINI SCIENTIST: We are excited and we're a little nervous. We've been imaging this area of the ring system for a while. We're fairly certain it's devoid of particles. But still, you can't not be nervous. O'BRIEN: Yes, all right. Well, we'll be watching. There's going to be some gaps in the coverage all throughout it. You'll be holding your breath, hoping to hear back.
But I understand it, there's a storm in Australia, a windstorm, which might make it actually hard to hear back from the spacecraft, as if you needed this.
GRAZIER: That's right. It adds to the tension a little bit. We have an antenna complex in Australia. We actually maintain three antenna complexes around the planet, about 120 degrees apart, so there's always one antenna facing your spacecraft.
The one facing Cassini right now is having a wind problem, wind storm. If it gets to a certain velocity we will have to still the antenna and won't hear back from the spacecraft as early as we would like.
O'BRIEN: OK. They'll be biting their nails to the quick if that happens. As we say, just adds a little bit to the drama here as Cassini, after nearly a seven-year voyage, enters into the orbit of Saturn. Hopefully, all will go well.
Kevin Grazier will be with us all throughout the evening. We'll be here all throughout the evening, giving you live reports. And as they come in, beginning tomorrow morning Eastern Time, extraordinary, we hope, images of the rings. Whether they're extraordinary or not, they certainly will be the closest pictures ever taken of Saturn's rings -- Kyra.
PHILLIPS: All right.
O'BRIEN: I'm sorry. We're going to break.
PHILLIPS: It's OK. I'm fascinated.
O'BRIEN: Kyra, I'm so glad you're involved.
PHILLIPS: That's a little inside joke Miles and I have.
Let's do it. Let's take Saturn and you and me and ring ourselves to break.
O'BRIEN: There we go.
(COMMERCIAL BREAK)
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