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Fed Chairman Powell Speaks Today; Rebound Cases After Paxlovid; Williams Prepares for Possible Final Match; Rogan Grills Zuckerberg. Aired 6:30-7a ET

Aired August 26, 2022 - 06:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[06:31:49]

KAITLAN COLLINS, CNN ANCHOR: This morning, chairman of the Federal Reserve, Jerome Powell, is set to speak at the central bank's annual Jackson Hole Economic Symposium. Investors, economists and policymakers will all be watching very closely, anticipating new guidance about what to expect from the economy this fall, especially with major questions about a recession looming overhead.

Joining us now to discuss are CNN chief business correspondent Christine Romans and CNN business correspondent Rahel Solomon.

This is such an expectations game.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

COLLINS: Is he going to tell investors what they want to hear this morning?

ROMANS: Well, look, usually it's Washington or Wall Street that's the center of the money universe for headlines. It's Wyoming today is the center of the money universe.

And this is the place last year where the Fed chief famously used the "t" word to talk about inflation and downplaying how long it would last.

Let's listen to what he said last year.

(BEGIN VIDEO CLIP)

JEROME POWELL, CHAIR, FEDERAL RESERVE: The spike in inflation is so far largely the product of a relatively narrow group of goods and services that have been directly affected by the pandemic and the reopening of the economy.

And from long experience we expect the inflation effects of these increases to be transitory.

(END VIDEO CLIP) ROMANS: Not narrow and not transitory. So now he has to go with confidence and project what the Fed's current thinking is on inflation. I think inflation will be the number one topic. There will be others. Supply chains, fiscal policy as well I'm sure we'll hear about. But inflation, how the Fed got it wrong and what they're going to do to make sure they're not behind the curve, I think that's what's going to be the big focus today.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Yes, and what I don't think we're going to hear, which a lot of people would love to hear, is how much are they going to raise rates in the September meeting. Will it be half a percent? Could it be three quarters of a percent? Some have said it might be a full percentage point.

ROMANS: A point.

SOLOMON: I don't think we're going to hear that clarity because he has shied away from that certainly in more recent meetings.

I do, however, think that he is going to acknowledge that more pain is ahead in terms of a joblessness. We haven't seen that yet, but they are expecting that in terms of inflation that will remain higher for longer. In terms of higher borrowing costs.

So, I do think there is going to be a real acknowledgment that there is some pain ahead. Perhaps some more pain ahead.

JOHN BERMAN, CNN ANCHOR: What questions do people want answers to that he could give answers to?

ROMANS: Well, the joblessness is a really good point because we still have a 3.5 percent unemployment rate. You know, can you really tamp down on inflation and get it eventually back to your 2 percent, right, which is the inflation they're comfortable with, without having the unemployment rate go up a little bit more, without having some pain in the jobs market. What does he think about that and what is he going to say about that? And are they being overly optimistic that they can engineer a -- what's called a soft landing with inflation this high? That's the big concern.

SOLOMON: And I would add, does the Fed expect that we will be in a recession or do they expect that we are already in a recession. I think he is also going to shy away from that because clearly that is not what they're intending. But we have heard just from different Fed speakers more acknowledgment that that is looking more and more likely.

COLLINS: Also a big question about once they're done raising rates if he's going to make clear that they will stay there for a while.

ROMANS: Yes.

COLLINS: I think that's a big question people have.

ROMANS: Or take it off if they need to, right.

COLLINS: And one of the questions we will have about this are the new mortgage rates, which jumped 5.5 percent this week.

SOLOMON: Yes, mortgage rates have just been doing some really interesting things this year, right? I mean, take a look at the difference between the average 30 year this week compared to last year.

[06:35:03]

I mean, more than 2 percentage points higher. And the reason, of course, is because mortgage rates are very sensitive to the Fed's benchmark interest rate. It's not one to one but they're very sensitive.

That said, and I say this very carefully and very cautiously, I do expect, just based on conversations I've had with the Mortgage Bankers Association and others who are in this industry, that 5.5 could be the cap for this year. Again, very cautiously. But 5.5 could be the cap. We had gotten as close to 6 percent.

The hope, however, is that because there are so much concerns about a recession, that that will keep a lid on mortgage rates. So, if you're looking for a home, perhaps that provides a little bit of relief.

ROMANS: Ironic, right, that fears of a recession are what keep mortgage rates from rising a little bit more.

SOLOMON: Yes.

ROMANS: But we know the Fed will continue to keep raising interest rates. And when you borrow money, the money you borrow is based on those interest rates. So, if you are in the market for an auto loan or you've got a lot of credit card debt, it's really incredible - I mean personal finance 101, if you can, you need to be paying down your high interest debt, or any interest debt at this point, because rates will continue to rise.

BERMAN: All right, Christine Romans, Rahel Solomon, big day for both of you.

ROMANS: Big day.

BERMAN: We know you'll be watching this very closely. Thanks for being with us.

COLLINS: Facebook founding Mark Zuckerberg just sat down for three hours of an interview with Joe Rogan. We'll tell you what he says about regulating bots and toxic content on the platform.

BERMAN: CNN rides along with southern California's water police as some residents are forced to pay heavy fines for over usage, including some big name celebrities.

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[06:40:39] BERMAN: California's water shortage is growing more dire. People there are only permitted to water their lawns on certain days. Now, there's a team who patrols the streets cracking down on those ignoring these measures.

CNN's Stephanie Elam got a firsthand look.

(BEGIN VIDEOTAPE)

CASON GILMER, LAS VIRGENES MUNICIPAL WATER DISTRICT: When it's in our face and the sprinklers are going off at noon on a Wednesday, it's an easy target for us.

STEPHANIE ELAM, CNN CORRESPONDENT (voice over): A sunny day in southern California likely means someone is violating drought restrictions.

GILMER: This street in particular was very, very green two months ago.

ELAM: Here in northern Los Angeles County, residents are only allowed to water one day a week and only eight minutes for each set of sprinklers. So, the Los Virgenes Municipal Water District is on the lookout for anyone breaking those rules.

GILMER: A little bit of runoff there.

ELAM (on camera): And there's some runoff down there, yes.

ELAM (voice over): We rode along with Cason Gilmer as he looked for water where it shouldn't be. Waste he and his team have captured on video.

And with outdoor watering making up to 70 percent of most customers' usage, Los Virgenes says cutting down on water waste outside can have a huge impact.

The water district gets its water from the state water project, which pipes runoff from the northern Sierra Nevada Mountains to southern California. But the snow pack was just 4 percent of normal at the end of winter, forcing unprecedented restrictions. Los Virgenes is only getting 5 percent of its requested water supplies this year.

MIKE MCNUTT, LAS VIRGENES MUNICIPAL WATER DISTRICT: We're having to supplement the water that we have been getting from the state water project with this water that you see behind us, which is considered our storage account.

ELAM: Sure, sometimes they fine those abusing the rules, sometimes thousands of dollars.

MCNUTT: We have a lot of celebrities, we have a lot of musicians, we have a lot of athletes.

ELAM: But the affluent haven of Calabasas (ph), inside the water district's territory, is home to many a-listers with deep pockets, some of whom use far more water than they should have according to recent data. Big names like Kevin Hart, Dwyane Wade and, according to "The Los Angeles Times," Kourtney Kardashian as well as sister Kim.

MCNUTT: Those specific celebrities have been working very closely with the district. They want to do the right thing in order to achieve a much more efficient water usage tier.

ELAM: The water district has learned that for some of its users losing water seems to have more impact than losing money.

GILMER: It really gets the attention of the people that are ignoring the drought.

ELAM: After a customer uses more than 150 percent of their water allocation four times, they'll be in line to get a simple but effective flow restrictor installed.

GILMER: This particular restrictor will give you around one gallon a minute.

ELAM (on camera): And what do people normally get?

GILMER: Normally, a three quarter inch meter is 25 to 30 gallons a minute. With the restrictor in, your sink works fine, your shower works OK, your irrigation will not work.

ELAM (voice over): Here is water flowing normally, and here it is with the restrictor.

MCNUTT: It's not meant to be punitive. It's meant to tell people, this drought is incredibly serious and what we need you to do is do your part.

(END VIDEOTAPE)

ELAM: CNN reached out to all the stars we mentioned here but we have yet to hear back. However, Dwyane Wade and his wife Gabrielle Union told "The L.A. Times" that they have, quote, taken drastic steps to reduce water usage in accordance with the new city guidelines and have since we moved into our home.

Now, overall, the Los Virgenes Municipal Water District says about 7 percent of its customers are in line to get a flow restrictor if their usage doesn't change, but they make sure those customers get ample warning before that happens.

John and Kaitlan.

BERMAN: California asking everyone to chip in.

First Lady Jill Biden is the latest high-profile person to experience a rebound Covid infection. So just how common is this? We have the data.

COLLINS: Plus, the U.S. Open is not open to an unvaccinated Novak Djokovic. The mixed response is pouring in as big questions remain about what's next for him.

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[06:48:31]

COLLINS: This morning we're learning coronavirus rebound cases after the treatment with the antiviral pill Paxlovid might be more common than the data suggests currently. This after the recent high profile rebound cases for president Biden, First Lady Jill Biden and Dr. Anthony Fauci.

CNN's Elizabeth Cohen joins me now.

And, Elizabeth, I have been raising so many questions about this with people at the White House and in the administration for a while because it does seem more often than what you see in the data. And I wonder what you've heard is behind that. Is it because people aren't testing as much, they don't know that they're rebounding, or what's behind this?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Kaitlan, it's such an interesting question. You know, Pfizer, who makes Paxlovid, they say only about 2 percent of people experience rebound. But, as you said, when you start knowing lots of people who are rebounding, you think, hmm, is that 2 percent right?

So, let's take a look at some of these numbers.

There have been 4 million courses of Paxlovid in the United States as of mid-August, and that's according to a more recent study, more recent than what Pfizer says, 5.4 percent of them have experienced rebound.

Let's take a look at just some of the names that have come up among people who are well known. President Biden, his wife, First Lady Dr. Jill Biden, Dr. Anthony Fauci, Stephen Colbert, CNN's own Dr. Peter Hotez, who's an infectious disease expert. I mean, you feel like the list sort of goes on.

It is unclear why this is happening. But, Kaitlan, I'll tell you one theory, and that is that Paxlovid, you only take it for just a few days and maybe that course needs to be longer.

[06:50:01]

That's the thinking is that just taking it for a few days is not the way to go, that maybe people need to be taking it for longer. Some researchers are looking into this.

COLLINS: And I guess the question, if you're at home and you're seeing people rebound, you're watching, you know, doctor - or Jill Biden -- First Lady Jill Biden, President Biden, Dr. Fauci, and you have a question, you know, is it still worth for people to take it? And what are you hearing on that front?

COHEN: That is a great question. So, what I'm hearing is this, only take it if you're at high risk for developing Covid. I'll use myself as an example. I had Covid in May and several people said to me, oh, are you going to take Paxlovid? And I said, no, I'm not over 65, I don't have underlying conditions, I was barely sick, I barely even knew that I had Covid, I wouldn't take the risk of getting rebound. And also there are some other issues with Paxlovid. You have to go off of certain medicines. So, only take it if you're really at risk for having severe complications from Covid.

COLLINS: Elizabeth Cohen, thank you for bringing us that information.

COHEN: Thanks.

COLLINS: A fiery President Biden launching his push ahead to the upcoming midterm elections. We'll tell you what he told a private room before his speech that has prompted a little bit of backfire from Republicans.

BERMAN: And we are awaiting the release of the redacted version of the Mar-a-Lago search warrant affidavit. It could come really anytime this morning.

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[06:55:43]

BERMAN: All eyes will be on Serena Williams at the U.S. Open on Monday as what she plays could be, but let's hope not, her final match.

Andy Scholes with more in the "Bleacher Report."

Hey, Andy.

ANDY SCHOLES, CNN SORTS CORRESPONDENT: Yes, good morning, John.

So, you know, earlier this month Serena announced that she's going to be evolving away from the game of tennis. So the U.S. Open will likely be the final tournament of her stellar career. And yesterday we learned she'll be playing the world number 80 Danka Kovinic in the first round. The match time has not yet been announced but it will likely be in prime time in Arthur Ashe Stadium Monday night.

Now, Novak Djokovic, meanwhile, will not be playing next week. The 21 time grand slam champion remains unvaccinated against Covid and is not allowed to travel to the United States.

All right, things got really ugly yesterday in a joint practice between the two teams from last season's Super Bowl. The Rams star defensive tackle Aaron Donald got ahold of two Bengals helmets and was just wailing away at Cincinnati players before being knocked down. It was the third fight of the day. And, after that, coaches just called off practice.

And, guys, Bengals Coach Zach Taylor said it just got a little too scuffly out there. Scuffly.

BERMAN: Yes.

COLLINS: That's one way to put it. SCHOLES: I'd say so. Yes.

BERMAN: Yes. It invokes images of Miles Garett (ph).

Look, a lot of these joint practices, there have been fights across the NFL this pre-season.

SCHOLES: Yes.

BERMAN: Interesting to see how much more they lean into that.

Andy Scholes, great to see you. Thank you.

SCHOLES: All right.

COLLINS: All right, Mark Zuckerberg just sat down for a three-hour interview with the podcast host Joe Rogan, covering everything from his company's plans for virtual reality glasses to Facebook's handling of issues like bots and content.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, CHAIRMAN AND CEO, META: I don't think that this stuff is black and white or that you're ever going to have like a perfect AI system. I think it's all tradeoffs all the way down.

(END VIDEO CLIP)

COLLINS: Joining us now to dig a little bit deeper into this interview is CNN's Omar Jimenez.

Omar, this was a really interesting interview. And he pressed him -- Joe Rogan pressed Mark Zuckerberg on how Facebook, how Meta handles the content that they put in the feed. And that is something that has been a big point of discussion, especially during elections when it comes to Hunter Biden's laptop and all of these questions about what shows up in your news feed and how high up it is.

OMAR JIMENEZ, CNN CORRESPONDENT: Well, yes, there's a lot in here about content modernization and polarization on social media, which you don't have to look far to find. And I think that Hunter Biden laptop story is one - that issue that tows that line. Of course, that story was first published by "The New York Post." That - it was that initial reporting that sort of gained that controversy about the laptop that was reportedly left at that Delaware repair shop, reportedly with allegations, many of them still unverified.

Twitter took the step to go ahead and suspend "New York Post's" account. Facebook said we are just going to limit the distribution of it. And Mark Zuckerberg talked about that with Joe Rogan.

Take a listen so some of their decision making around that time.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, CHAIRMAN AND CEO, META: The FBI, I think, basically came to us, some folks on our team, and was like, hey, just so you know, like, you should be on high alert. There was -- we thought that there was a lot of Russian propaganda in the 2016 election. We have it on notice that basically there's about to be some kind of dump of -- that's similar to that.

The distribution on Facebook was decreased, but people were still allowed to share it. So, you could still share it, you could still consume it.

JOE ROGAN, HOST: So when you say that distribution is decreased -

ZUCKERBERG: It - it got shared -

ROGAN: How does that work?

ZUCKERBERG: Basically the ranking in news was a little bit less.

ROGAN: Did they specifically say you needed to be on guard about that story?

ZUCKERBERG: No. I don't remember if it was that specifically, but it was -- it basically fit the pattern.

(END VIDEO CLIP)

BERMAN: You will hear more about that interview in that moment today I guarantee it.

COLLINS: Yes.

BERMAN: Also, Omar, you mentioned, he talked about polarization.

Let's listen there.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, CHAIRMAN AND CEO, META: There's a bunch of countries where social media is just as prominent, but polarization is either flat or has declined slightly. So, there's something kind of different happening in the U.S.

But for better or worse, I mean it does seem like the next several years do seem like they're set up to be quite polarized.

(END VIDEO CLIP)

JIMENEZ: Well, and, for starters, he said he doesn't want Meta or Facebook to be the company that's actually singularly deciding what is misinformation or not. So they've tried to go through third parties. But he said even there bias can be a potential issue.

[07:00:01]

And he said one of the main factors is, you could either double down on the bad actors and then accidentally sweep up a number of good actors or say, you know what, the price of.