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Quest Means Business
Stocks Plunge As Powell Warns Of Inflation Fight Pain; Justice Department Releases Affidavit Used To Search Trump Home; Zaporizhzhia Plant Reconnected To Ukraine's Power End; Moderna Suing Pfizer, BioNTech Over COVID Vaccine Technology; Pakistan: 33 Million People Impacted By Floods; NASA's Artemis 1 Mission Set To Launch Monday. Aired 3-4p ET
Aired August 26, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: The only one thing on investors' minds today is the reason with the New York Stock Exchange is Jerome
Powell's Jackson Hole speech and the markets initially thought about it, worried about it and now, it's down over 850 points.
We've got an hour of trading to go. Who knows? I don't think we do know which direction it is likely to go. Anyway, the markets and the event of
the day that has driven them in this direction.
The Fed Chair has vowing to stay the course, Jerome Powell says the bank must act with resolve to bring down inflation or risk greater pain.
An affidavit shows the FBI believed they would find evidence of obstruction in Donald Trump's Florida home.
And Quest Means Broadway, the Pulitzer Prize winner Michael Jackson is here to talk about his hit musical "A Strange Loop."
Live tonight from the New York Stock Exchange on Friday. It is August the 26th. The month may be over, but we're certainly not. I'm Richard Quest,
and I mean business.
A warm welcome to the program from the New York Stock Exchange tonight. Now, you'll be well aware we had intended, we told you about it last night
to present our program from the Metropolitan Museum of Art. And so we fully intended to until we heard Jerome Powell's speech and we realized the
markets were taking this much worse than perhaps had been anticipated.
And then there was the news from Donald Trump about the affidavit and the search of his Mar-a-Lago. We now have the redacted affidavit, and we need
to get to grips with all of that.
So, the best laid plans taking the Trump affidavit or at least, the affidavit in the Trump case, along with the Jackson Hole speech, and we are
with you tonight from the New York Stock Exchange. We're going to cover both stories in detail.
Let's start with the Fed. The Fed is standing firm, that's the message from Jerome Powell. Interest rates will stay high until the job is done. Those
are exact words job -- "until the job is done." And inflation, that's the definition of it being done is down to two percent.
So the Dow at the moment, look at the numbers, you'll see how they're trading. The Dow is down over 800 points. The S&P 500 is off two and a half
percent and the NASDAQ is three percent lower.
There were three words when I read Powell's eight minutes -- Powell's eight-minute speech, there were three words that got me "forceful,
purposeful, and restrictive."
They were the words he used to describe Fed's monetary policy in raising rates. They also admitted households will be hurt, but as other Central
Banks have said, not to do this will be worse.
(BEGIN VIDEO CLIP)
JEROME POWELL, US FEDERAL RESERVE CHAIRMAN: Higher interest rates, slower growth, and softer labor market conditions will bring down inflation. They
will also bring some pain to households and businesses.
These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
(END VIDEO CLIP)
QUEST: Now, Rahel Solomon is with me.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: It was worse -- I don't want to say worse. I mean, we knew we had -- you told us last night -- establish
his credentials. Did he do it?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: I think absolutely. What's interesting that I think you're keying in to there, Richard, is that he
didn't necessarily say anything new, but I would argue it was the way in which he said it.
He was very direct, he was very clear, essentially saying, hear me now. Make no mistake. Let there be no misunderstanding that we will continue to
raise rates until we see evidence of lowering inflation, which they're not seeing yet.
He actually even referred to some of the more recent inflation reports that had led some to believe that maybe inflation is easing, maybe the Fed will
take their foot off the brake a bit sooner than we had initially thought saying that fell far short of what they're looking for as a sign that
inflation is easing in a way to make them feel confident about their efforts.
QUEST: So, there are really three areas to the speech, aren't there? There is the how fast the rate is going up, how long will they stay -- will they
weaken when the going gets really tough? And how they got here in the first place?
Now, if we look at this idea of will they weaken. He talked about it in the speech. He specifically said that the important time will be when things
SOLOMON: Yes, and I think he acknowledged that things will get tough, right? I mean, in past speeches, we've heard him be certainly a lot more
optimistic, talk about the strength of the economy, talk about perhaps a soft landing, talk about the reasons why he and the committee believe that
there is a chance they could pull it off, you didn't hear any of that talk today.
He was very singularly focused on getting this message across to the markets and to the international community that they will continue to raise
rates until they lower inflation, which again, we haven't seen. But what's interesting, Richard, is when the news crossed after the speech, I was
looking at the markets and as you can see here, they were green and myself and David Brent (ph) my producer, were all very sort of confused about what
was happening and take a look after the markets were able to digest what in fact, this means, you can see what we're seeing now: Dow off more than 800
QUEST: We'll talk more about this with the market strategist on that aspect of it. Rahel Solomon, watching over.
With me is Paul Romer, former World Bank chief economist, and Professor of Economics at NYU.
How good to see you, sir.
PAUL ROMER, FORMER WORLD BANK CHIEF ECONOMIST: Good to see you. Although, I feel like this was bait and switch. What happened to the Metropolitan
QUEST: I know. You only agreed to come in person because you thought you'd see the pictures at the MET.
ROMER: Well, yes.
QUEST: And instead, you've got me here.
ROMER: Yes, well.
QUEST: But thank you, sir.
ROMER: Glad to be here.
QUEST: Thank you for accommodating. Were you surprised by what Powell said?
ROMER: I was a little bit surprised at how clearly he spoke. Remember Greenspan's comment that, "If you think you understood what I said, I must
have misspoken." This was nice in the sense that he was very clear.
I also think -- they've made me think of that saying, you know, speak softly and carry a big stick. I think he is speaking loudly and hoping he
doesn't have to use a big stick.
QUEST: You see now, that was the bit in the speech, where he said, our commitment to keep going, we will keep going even when -- the pace of rises
will be one thing, he is not going to give up when the going gets tough.
ROMER: Yes. Yes. No. And then he means that, and he wants people to understand that because that way, he won't have to take even more
aggressive action, he establishes his credibility.
QUEST: I was just trying to look for the actual words, which I can't find immediately. But he used the word "forcefully."
QUEST: "Purposefully, restrictive," all these very, very, very strong words.
QUEST: So, what do you see as a neutral? And what do you now see as a restrictive rate?
ROMER: Well, but the other thing to remember though, is they keep saying they're going to be driven by the data. So, they're trying to keep their
options open, they want to see what happens. They're going to respond to the data.
But they are signaling, if they have to be restrictive, if they have to be forceful, if they have to hurt -- cause some hurt, they're willing to do
it. Now, I think the other thing that we need to keep in mind is that what level of interest rates doesn't really mean anything. It's always interest
rates relative to inflation.
So then we've got to think about, well, what's happening to inflation? If we end up with two percent inflation, we might end up with two percent
nominal rates. I think the big open question right now is should, would we be willing to accept something like a little bit higher rate of inflation,
and that will mean higher nominal rates, but the difference, the real rate could still be essentially zero.
QUEST: Judging by today, I mean, this is the idea that shift the target.
QUEST: What? Four percent?
ROMER: Well, yes, you know, three percent, four percent. After the interest rate --
QUEST: But that is an admission of failure that you couldn't get it back to two, which is very hard to do. If you look at the ECB, they almost never
got it to two percent.
ROMER: No, no, but remember, we were talking about raising it to four percent, back when we were well below two, and the failure was we ran out
of ammunition when we ran to stop the financial crisis. So .
QUEST: I know it's academic. Do you see a recession?
ROMER: I think it's more likely than it was six months ago, but I think, to be honest, we are in an environment with so much uncertainty right now.
I don't think anybody can say for certain we're going to see a recession or not, but it could well happen.
And I think it would be unfortunate, because I think we had it right that we need to let inflation -- the inflation target go up to four instead of
QUEST: Right. But I have to -- okay, so I have to push you back on -- black to the plan. I mean, that is a view that a certain number of
economists like yourself have, but there are other economists who say absolutely. Two percent has been determined to be the mean rate for good
growth, non-inflationary growth with low unemployment.
ROMER: Yes. But what we have to admit is that, what we learned is with two percent inflation, that means we may run out of ability to stimulate when
we get the next deep recession.
QUEST: Which was exactly the issue that we had at the end of the Great Financial Crisis.
QUEST: Now, one other point, since there's so much in this speech. It's slightly unfortunate and Powell referred to it in his speech, other Central
Banks are all doing the same thing. So, it's not like there is an engine of growth that's going to help, or at least prevent us from going too far
back. Here, everybody is restrictive.
ROMER: But it's good to remember why that is. Everybody is responding to the same shocks, the kind of supply problems we had coming out of the COVID
pandemic, and then the invasion in Ukraine.
So, both of those things should go away over time. So, this is a temporary increase in inflation. I don't think we should take permanent action to
deal with a temporary problem.
QUEST: Good to see you, sir. I am very grateful.
ROMER: Good to see you.
QUEST: Thank you very much, indeed.
QUEST: Thank you very much indeed.
Now, the other major story that broke out today, the US Justice Department has finally released its heavily redacted affidavit that was used to
justify the search of Donald Trump's Mar-a-Lago home.
It shows, when you look at it and you read it and you get past the redactions, the FBI argued there was probable cause to believe classified
records were improperly taken to Florida.
Authorities asked to search after a previous batch of confidential documents was retrieved in May.
Jessica Schneider is in Washington. She is our justice correspondent.
When you look at it, do we get it? I mean, obviously, to a large extent, they had probable cause to believe, but we don't know why the affidavit --
doesn't -- it is so redacted, we don't know the evidence upon which the affidavit was sworn.
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: That is true. There is a significant portion of this affidavit, probably more than half of it that
is, in fact redacted. But despite that, we are getting a glimpse and you know, some startling details, because they go into the hundreds of pages of
documents that the National Archives tried for months to get back from Mar- a-Lago.
And in particular, it addresses the 15 boxes of material they finally did get back in January earlier this year, and that is what was alarming and
led to the basis for this affidavit, because 14 of the 15 boxes contain classified information.
And in this affidavit, we see what is proving to be particularly alarming to Intelligence experts that we've been hearing from, and it's that many of
these documents contained several markings related to the highly sensitive and classified nature, including HSC markings. And that means, you know,
information gleaned from human sources.
And the key here is that if that information was revealed, it could really endanger the lives of people secretly, covertly working around the world.
So, that was a big concern for investigators, and part of the reason that laid the groundwork for that search warrant that we saw just about two-and-
a-half weeks ago.
So it does lay out prosecutors arguments about why they needed to get into Mar-a-Lago with that search warrant. You know, in addition, they said they
believed additional classified documents containing National Defense Information still remained at Mar-a-Lago. They also said that evidence of
obstruction could be found at Mar-a-Lago.
So ultimately, as we know, the Judge issued that search warrant. It was executed on August 8th, and that search as we know uncovered even more
documents that were marked classified. So all of this, Richard really laid the basis for that search warrant.
So yes, while a significant portion of this affidavit is redacted, it just further underscores how alarmed officials of the Justice Department were
national security officials, how alarmed they were about the information that they uncovered when they got those 15 boxes in January, and then how
much more they believed that there was that justified going in on August 8th to Mar-a-Lago to get even more.
So, this is all laying the basis of what they say is an ongoing criminal investigation. It's pretty, pretty amazing that this has even been unsealed
because usually it's not until we see charges.
That's still to come, perhaps -- Richard.
QUEST: You'll be following it closely. I'm grateful for you tonight. Thank you, Jessica Schneider in Washington.
To Europe now, and after the break, a growing threat to safety at the Ukrainian nuclear power plant that lost power. The President is warning the
region almost had a radiation disaster on its hands.
QUEST MEANS BUSINESS. Good evening to you.
QUEST: And so to Ukraine where the country now says power has been restored to the nuclear power plant that had been cut off from the
Ukrainian power grid, the Zaporizhzhia Nuclear Plant. It's Europe's largest and it has been held by Russian forces since March.
The clashes sparked fears of its safety. The Ukrainian President Zelenskyy says that if it weren't for backup generators, in his words, a radiation
disaster would have erupted.
CNN's Sam Kiley, on the reporting on the ongoing threat.
(BEGIN VIDEO CLIP)
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): It's an all too routine scene, a Ukrainian home destroyed by a missile, but here
the lucky escape of a young couple is overshadowed by a potential catastrophe.
The first Russian rocket hit the local soccer pitch and sent them scrambling into their basement safe from the second.
(ANDREI speaking in foreign language.)
KILEY (voice over): "After what happened, we jump at every sound," Andrei (ph) says. The Ukrainian authorities say that both rockets were fired by
Russian troops from the grounds of a nuclear power station captured in March.
(on camera): The international consternation over the future of the Enerhodar Nuclear Power Station is very obvious when you stand here and you
can see the six reactors of the biggest nuclear power station in the whole of Europe.
The United Nations, the international community are all reacting in horror at the mere thought that this could be at the center of fighting.
KILEY (voice over): Ukraine blames Russia for using the nuclear plant as a fire base and insists that it's not able to shoot back for risk of blowing
up the nuclear facility.
(MYKOLA STUPAK speaking in foreign language.)
KILEY (voice over): "The Russian occupiers shoot all the time to provoke the Armed Forces of Ukraine and to spread panic among the people. we
understand that the power plant may explode because of their actions. I just don't understand. Maybe they just don't get it," he told us.
The United States, the United Nations, and Ukraine have all called for Russia to leave the nuclear plant and for it to be demilitarized. These
demands are growing in volume as the bombardment of Ukrainian towns allegedly from around the six nuclear reactors has intensified.
(ANDRIY TUZ speaking in foreign language.)
KILEY (voice over): Andriy Tuz worked at the plant until he escaped the Russians, but then he was recaptured, he says and tortured before being
released. Now, he is in hiding in Western Europe and he says the possibility of a disaster is very high.
(ANDRIY TUZ speaking in foreign language.)
KILEY (voice over): "I would say 70 to 90 percent if we're talking about the most optimistic scenario. I'm very worried about it."
And civilians in the Russian occupied town next to the plant have been stuck in traffic jams, trying to flee a potential nuclear escalation.
Ukraine's claims that it hasn't shelled the nuclear site cannot be verified, but there is no doubt that Russia has used it as a safe location
to attack Ukraine from.
Ukrainians have been conducting nuclear disaster drills in cities nearby and both sides have said that some kind of incident is imminent and could
cause massive radioactive contamination, or a meltdown -- a cataclysm that could be felt far beyond Ukraine, even in nearby Russia.
Sam Kiley, CNN in Musiivka.
QUEST: Now researchers say that Russia is flaring off and burning up to $10 million worth of gas every day -- of natural gas.
The information comes from Rystad Energy, which has been tracking the flares from this LNG plant near the Finnish border since mid-July. The
reason is a mystery.
Russia, of course, is drastically cutting out the gas exports, and the continent Europe is battling shortages.
Fred Pleitgen is with me from Moscow.
Fred, I'm wondering, this increase in flaring on the natural gas, is this a technical thing that Russia has to do because it's not pumping the gas down
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: That could very well be the case. It's interesting. If you read the Rystad Energy report,
they said that it could be due to inefficiencies. It could be also that they are testing the Portovaya plant. Of course, it's one that has seen a
lot of maintenance over the past couple of weeks, but they also say there could be political reasons as well. And of course, one of the things we
have to point out, Richard, is that the Portovaya plant feeds into the Nord Stream 1 pipeline.
And one of the things that both the Germans and quite frankly, the Russians have well have been saying is that the Nord Stream 1 pipeline has only been
carrying gas to about 20 percent of its capacity, which the German say is politically motivated.
The Russian say it is due to a turbine that is missing, but also one which they're not willing to take back from the Germans right now, because they
say the paperwork isn't right.
So Rystad said that there could be political reasons behind it, but it isn't totally clear what exactly the reason is for this flaring, which, by
the way, has been going on since at least the 11th of July. So a very, very long time.
QUEST: Fred, slightly tangential to you, but you'll see where I'm going to get. The next report we've got in tonight's program is about the very sharp
rise in UK capped energy prices, 80 percent, because of the energy crisis, and one of the major issues, of course, is Nord Stream, Ukraine, et cetera,
Will President Putin in a sort of Schadenfreude way, be smugly pleased that say the UK and others are feeling the effect, and does this embolden him to
realize he can cause huge economic pain?
PLEITGEN: Well, I'll say this, not just the UK obviously. If you look at Germany as well, the energy prices have gone skyrocketing, sending, for
instance, Olaf Scholz to Canada to try and get future energy deals for Germany there. In fact, Olaf Scholz was in Cuxhaven tonight, which is the
hub of German wind energy. Did they talk about how he hopes that Canada will in the future be Germany's energy partner? Same is true for some
places in The Netherlands as well.
It could very well be the case that Vladimir Putin is not just smug, but that he is also thinking that he could possibly outlast the West as far as
their support for Ukraine is concerned because of the fact that so many European nations are clamoring for energy.
And one of the things that I've been seeing throughout the week, and specifically in the last couple of days on Kremlin-controlled media is
there is a lot of talk. They are showing a lot of segments from the United Kingdom, from Germany about how these countries are in a real energy
So, it certainly seems as though Moscow does believe that that is something where they have sort of a pressure point on the Europeans. You know, and if
you look at some of the things that the Russians have, for instance, been saying to the Germans, they keep saying, well, you know, Nord Stream 1 can
only pump about 20 percent of its capacity right now. However, there is a finished pipeline called Nord Stream 2 that the Russians say could be
So those are the kinds of things that you hear from Moscow where clearly, they've realized that energy is, of course, a big issue for the Europeans
and certainly something where they believe that they might have a good deal of leverage -- Richard.
QUEST: Fred Pleitgen in Moscow. Fred, thank you.
Now, a story, though, that I talked about in the United Kingdom. If you're watching us in the UK tonight, you're probably -- you'll be well understood
to have a stiff drink at your elbow as you digest the news that electricity and power rates could be going up by as much as 80 percent.
That is a result of the latest announcement from the regulator, Ofgem, which basically has increased the cap that the operators those who provide
allowed to actually charge.
Eighty percent, it goes up again having been at 80 percent once before, and the prospect for the new year is even higher.
CNN's Scott McLean is in London.
SCOTT MCLEAN, CNN CORRESPONDENT: Well, the steep rise in energy prices is not by any stretch unique to the UK, it is a huge problem across Europe.
France and Germany are recording record high electricity prices and EU Energy Ministers are now planning to convene an emergency meeting to
discuss what to do about their newfound energy war with Russia.
In the UK, the country's energy regulator has announced the price cap for household energy prices. Electricity and gas will rise by 80 percent. It is
now almost three times what it was a year ago.
Now, this price cap is really a cap on profits that companies can take above the wholesale price of gas and electricity and their other expenses.
For the average British family with average energy usage, it means about $350.00 is spent per month on gas and electricity, which is more than 10
percent of the median after tax household income in the UK.
The energy regulator in the UK says that the reason that prices are going up is because post COVID, the economy bounce backed quicker than expected,
creating more demand and because of cuts in Russian gas exports to Europe, which are down some 77 percent compared to the same time last year.
The head of the British energy regulator tried to put all of this in context like this.
JONATHAN BREARLEY, CEO, OLGEM: And when I look at the prices in winter, they are already 15 times what they normally are.
Now, if that were to happen in petrol, that would mean it would cost us 400 or 500 pounds just to fill up our car. So, the cost of energy are changing
Now unfortunately, we do need to reflect that cost and that is why the price cap is changing today.
MCLEAN: Now, this is all likely to put major pressure on not only the caretaker Prime Minister Boris Johnson, who has already announced a series
of measures meant to ease pressure on household budgets, but also on his likely successor, who polls indicate will likely be Liz Truss for proposals
to ease pressure on ordinary households has so far been modest and fairly nonspecific.
She is pledging to cut taxes and to increase domestic oil production something that may help in the long run, but certainly not right away.
Scott McLean, CNN, London.
QUEST: It is QUEST MEANS BUSINESS tonight live. We were meant to be at the Met. Instead, we're at the NYSE. The Met for the Big Board, from the Temple
of Art to the Temple of Mammon, and for good reason.
Today, interest rates, we were told are going to go up further and faster and probably longer and there will be a great deal of pain because when
Jerome Powell speaks, the markets listen, and the markets are down heavily at the moment as the storm clouds gather and the inflation war gets
In a moment.
QUEST: Welcome back. It's QUEST MEANS BUSINESS. Here is the latest news headlines. The vaccine major Moderna is suing Pfizer and its German partner
BioNTech for patent infringement. Moderna is alleging that Pfizer copied mRNA technology patented between 2010 and 16 which was critical in making
the COVID-19 vaccine. There's no word on the damages or monetary damages being sought. But the drug maker Moderna says it isn't trying to get Pfizer
vaccines taken off the market.
Pakistan's climate change minister says unprecedented flooding has impacted 33 million people and killed more than 900 over the past few months. Now
this is one of the worst areas, Quetta which is dealing with power outages that have hampered the rescues. Officials are requesting more than a
million tents to shelter people who have been displaced.
NASA's Artemis 1 mission is set to launch from Florida on Monday. It's an uncrewed spacecraft, it will take a 42-day journey further than the moon,
further than any spacecraft intended to carry humans has ventured before. Three mannequins will experience the flight. NASA hopes to send human
astronauts on a similar journey in 2024.
Jerome Powell, rather this time yesterday, you and I were wondering, was he actually going to do it? Was he going to do the deed and say what he needed
to say? Apparently he did. And more in spades. He doubled down and the market doesn't like it. We're at the New York Stock Exchange today instead
of amongst the glorious art at the Metropolitan Museum because it is such a bad day on the market.
The Dow is off 2-1/2 percent. It turned negative. The real faults happened when they digested.
The NASDAQ is the worst day since June. Nvidia, a chipmaker is down almost eight percent. The S&P is off three percent.
Kristina Hooper is Invesco's chief market strategist. So ma'am, what's the strategy now?
KRISTINA HOOPER, CHIEF MARKET STRATEGIST, INVESCO: So the strategy is to hang on and don't get scared. What we learned the best -- well, I should
say the biggest lesson we learned from the global financial crisis was don't get out, don't panic, because you lock in your losses. And that is
very much the lesson that I want investors to keep in the back of their heads on days like today when it is easy to panic.
QUEST: OK. Will he keep the policy as it is? He says we will keep at it until we are confident the job is done. And he defines the job inflation at
two percent. Now he does at some point, the stance will become appropriate to slow the paces. But you think they're going to pivot.
HOOPER: I do think they're going to pivot. It's going to be a subtle pivot. But the start of the pivot will likely occur in September. Now, you might
say how can -- how can that happen if he was so resolute to that? And I would argue that he absolutely has to be this way. And this is what we've
heard from the Fed for weeks. They're going to continue to be hawkish and hawkish and hawkish until September 20th, 21st when they deliver a slightly
less hawkish policy with only a 50 basis point move.
QUEST: So that's still huge, 50 basis points.
HOOPER: It is but then that sets us on a path to see a few more 25 basis point hikes because he also said, and I don't have the exact in front of
me, but he also said that we're going to get to a level where we stay for a while.
QUEST: Oh, yes.
HOOPER: So that means it has to be a tolerable level.
QUEST: Yes, yes. OK. Let's be slightly off -- slight. Investors now and I'll put myself in the same league, will be wanting to say OK, the market
is going down, I get that.
And there will be buying opportunities maybe next month, next year, whatever, there will be moments to buy these prices. Should I lock in
losses to buy? Because there are some things that will never come back. Never say never. But you know my argument. My argument is should investors,
whether, what -- for one reason or other, should investors be building some form of war chest to buy when they feel the time is right?
HOOPER: Well, I certainly think investors should have a list of stocks that they would like to add to their portfolio because there will be
opportunities created in this kind of environment, which is so volatile and so driven by the Fed. And there's a lot of mystery around the Fed. So let's
face it, there are going to be down days like today, because the Fed assumes that is -- the investors, the market participants assume that the
Fed means business.
And yet, what I would argue is that frontloading, what we've seen, has paved the way for the Fed to ease off. Now that doesn't mean again, it's --
this is not the end of rate hikes, but I do think we're pivoting to a softer path.
QUEST: So when we look at a market, the ability of the market to withstand these gyrations. I come back to what you said earlier, and I won't hold you
to this, but you believe we may have seen a low?
HOOPER: You can hold me to it.
HOOPER: I don't think we're going to retest our lows from June. I think that what we're likely to see as volatility will go down from here, will go
up from here. But I do believe we'll finish this year at a higher point than where we are today. Because at some point, it might not be September,
but I do believe the Fed is going to make that pivot and it's going to be more comfort.
QUEST: I'm just fascinated using the pivot is going to have as early as September, I would have said if they are going to it's when the pain hits
back in February.
Well, everyone was paying attention to Jay Powell speech at 10:00 a.m. But what also came out at 10:00 a.m. was the Michigan consumer survey. And
guess what? Inflation expectations for five years ahead have it to handle. 2.9 percent. So the Fed is already starting to achieve its goals. And it's
got to keep talking tough to continue to manage and inflation expectations but I think we're on a path.
QUEST: On a path. Thank you. Hopefully got the golden bell. Thank you very much indeed. Lovely to have you with us now.
QUEST MEANS BUSINESS tonight from the stock exchange. This year's Tony Award winner. The best musical is Strange Loop. The author Michael R.
Jackson tells me about the show's creation and how it found commercial success.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
QUEST: When we talk about pivoting, of course, look at the markets now. And you see the market is down. The Dow is off more than 900 points. I'm not
surprised. We are into this extraordinary 20 minutes, 10 minutes, five minutes of the end of trading. You know, people always talk about the floor
behind me being very quiet when it is until you get to the last 15 minutes of trading.
And this is where people will make the decisions investors, how do I want to go into the weekend. So I want to go into the weekend long on a stock,
short on a stock, do I want to clean out. And so that's why I would expect great volatility. And I would not be surprised to see a four-digit loss on
the Dow before the day is over. But that's just from history. Now, when we decided to pivot from museum to mammon, we knew we were not going to pivot
on the question of our next guest.
It was simply too important to hear from him tonight. It's a musical, A Strange Loop, which made its Broadway debut in April. And it has been a
remarkable hit a smash hit, as they say. It's led this year's turning nominations. It took home the award for the best musical. And it's gross
more than $10 million this year. And the musical is about a queer black man who's writing a plan about a queer black man, and so on.
Hence, the name Strange Loop. It's -- beneath, that is the tale of one man's difficult search for identity. Michael R. Jackson is the playwright
behind it. He's with me now. Thank you, sir.
MICHAEL R. JACKSON, AMERICAN PLAYWRIGHT: Thank you.
QUEST: And thank you for pivoting from the museum to here. We're grateful to have you here at the Exchange.
JACKSON: Of course. Happy to be here.
QUEST: So this idea, I think it is the unusualness of the subject material. Look, there have been dark subject materials a million times. There have
been bizarre, there have been comedic, but this brings all of them together in a very, very lovely strange way. Were you surprised for the success?
JACKSON: I guess on one level, I was surprised because what I was doing was so specific that I didn't know whether that was something that would
translate to general audiences. But on another level, I wasn't surprised because I think that -- I sensed that there is a hunger out there for
people to see like real stories of people sort of speaking the unvarnished truth. And that's something that I'm sort of known for in my work.
QUEST: Right. And related to that, of course, coming out of a pandemic, everybody -- there's a there's a brutality and a harshness to many of us
knows that we've been through. We've been we're through. We're raw. That's the (INAUDIBLE) we're raw.
JACKSON: Yes, there's definitely like a rawness. But I think also like a hunger for entertainment. And the show definitely leans into the
entertainment value in a big way.
QUEST: Now, we (INAUDIBLE) report in the Times that talks about audiences are not back in many cases. And many of the theaters are still keeping mask
policies, possibly because it's an older demographic, I saw the opera (INAUDIBLE) keeping masks. Are you finding -- your show is not really
having that problem at the moment.
JACKSON: Well, you know, I think some of the theaters are adopting policies that they think will best, you know, meet the needs of the folks who are
coming in there. And people are sort of trying to really figure out how to be in the theater, given the up and down of COVID. And so, you know, I
think that we're all just doing the best that we can.
QUEST: Within -- that's a very good way of putting it.
QUEST: That's a very good. So, what's next? After doing something like this which is a success and with success comes pressure.
QUEST: Do you agree?
JACKSON: Oh yes. Absolutely.
QUEST: I mean, it's not what you did, it's what you're going to do.
JACKSON: That's what they say. I'm trying to sort of work through my own internal process of screening each piece that I'm working on with sort of
its own nuance and its own integrity, and not get bogged down in the success of A Strange Loop. I have other stories to tell, and other songs to
write. And I'm just going to sort of step out on faith that my continued artistry will be something that resonates with audiences.
QUEST: Why don't you think you hesitate?
JACKSON: I think part of it is because I spent nearly 20 years working on it. And so --
QUEST: What would you mean by that?
JACKSON: So I started working on A Strange Loop when I was about 23 years old. And we got to off Broadway when I was 38 and we got to Broadway when I
was 41. And -- well, technically 40. 40, 41.
And so, I am I think that like just putting the time in and really sort of honing what the story was, what the style of it was, working with my
collaborators on it, many of the actors in this piece have been with it for about, you know, 10 years or more. And so I think that the audience senses
that there's something that's really well made, in addition to being something that's uncompromising in what it has to say and who it has to say
And it's sort of vulnerability and openness and rawness and it's sort of explicitness, and it just has a lot of content and form that's just really
sort of testing the boundaries. And I think that audiences, you know, are excited to see something new.
QUEST: And we're grateful, sir, you came to see us tonight. Thank you very much indeed.
JACKSON: Thanks for having me.
QUEST: QUEST MEANS BUSINESS live from the New York Stock Exchange. The global food supply chain is under pressure. We know that much. And one
airline is making a difference by growing things indoors. Emirates, has taken issues into its own hand and created its virtual farm.
Anna Stewarts reports.
ANNA STEWART, CNN REPORTER (voice over): Airplane food, some people love it. Some people hate it. Either way, meals are a crucial part of any long
haul flights. And making sure all ingredients are at hand is a constant challenge for caterers.
KIERAN DOWD, VICE PRESIDENT, SOURCING SOLUTIONS EMIRATE FLIGHT CATERING: They will always be concerned somewhere in the world through droughts,
through floods, through labor shortages, and also through shipping and other delays that can happen that way.
STEWART: To tackle these issues, Emirates Airlines thinks the solution lies in agritech.
DOWD: So welcome to the farm. We've got a showcase of the projects that we're currently growing in here.
STEWART: Based in Dubai in the UAE where almost 90 percent of the food is imported. They've opened their own vertical farm. Larger than four soccer
fields put together and worth $14 million. The company says it's the largest in the world.
DOWD: Behind me in this room. We've currently got 45-1/2 clubs growing. Across the facility that's over 1.1 million growing at any one time.
STEWART: From kale to arugula to lettuce. The leaves produced here will be harvested, sent to Emirates flight catering and prepared into some of the
200,000 meals that go out of this kitchen every day.
DOWD: The supply chain is such that within 12 to 24 hours of it being harvested, it will be on the plate in front of them, they will taste it in
the crunch, they will taste it in the freshness.
STEWART: More than growing fresh local produce is about making operations more sustainable and reducing water usage.
DOWD: The room environmental system but actually draws about 1500 liters a day out of the room which then gets recycled.
STEWART: But when it comes to costs, the airline says there are no major advantages yet.
DOWD: The cost is comparable to imports currently. We believe we can bring further efficiencies into the efficacy that we currently grow at.
STEWART: It's a first step towards change.
DOWD: What we're doing here today is demonstrate that sustainability can be at the heart of growing fresh produce in the Middle East. It signals the
development of a new generation of agritech.
STEWART: From a more stable supply chain to sustainable food production, but other businesses the Emirates Airlines vertical farm could be food for
thought. And for passengers your meal could be playing a part in the future of agriculture. One more reason to eat your greens.
Anna Stewart, CNN.
QUEST: That's Anna Stewart, Think Big. And the vertical farm. Now about 10 minutes or so, 12 minutes left of trading on Wall Street. The numbers show
their own story. The Dow is down and NASDAQ is often, the S&P 500 is also lower.
QUEST: The United States and China would appear to have reached a deal that could prevent the mass delisting of China stocks from U.S. markets. The
very threat of that could cause companies like Alibaba to fall sharply. So this agreement gave Alibaba a lift. The deal would let U.S. regulators
inspect audits done by accounting firms in China and Hong Kong. Beijing kept these records off limits to U.S. inspectors, even for those Chinese
companies listed on Wall Street.
Paul La Monica is with me. Alibaba, this is all too late for J.D. which has been gone. But J2 and all the rest of them jd.com This is really something
that could make a difference.
PAUL LA MONICA, CNN DIGITAL CORRESPONDENT: Yes, this could be good news, Richard. Four companies like Alibaba and J.D., other Chinese ecommerce
firms can dou, duo. Neo, some of the electric vehicle stocks that are all trading in New York. Their shares are not getting a lift today because the
broader market is really taking a tumble. Thank you, Jerome Powell. But this is good news for the longer term I think for investors in these
companies as well as for China-U.S economic relations.
It is a sign that U.S. and China are willing to cooperate on certain aspects and, you know, do their best to make sure that top Chinese
companies have access to capital in America.
QUEST: Oh, let's talk about Jerome Powell's speech. You know, I suppose at one level, it was revolutionary and what he said, but it is a statement of
the obvious that, you know, we have a two percent inflation target. And we're going -- he was talking to central bankers, he had to do the central
bank and machismo dance.
LA MONICA: Yes. I think that the Fed still needs to obviously prove to both other central bankers as well as the market that is serious about
inflation, it's not going to throw up the Mission Accomplished sign because inflation pressure has started to ease a little bit, it's still very high
and very painful for many consumers. So, the Fed is going to raise rates as aggressively as they need to.
And of course, they're going to be data dependent. We're getting a jobs report next week. We'll get inflation readings throughout the month of
September before the next Fed meeting. But if any investors were hoping that Powell was going to coming out -- could be coming out of Jackson Hall
wearing his job costume and saying that they're going to slow down their pace of rate hikes and maybe even cut rates in 2023.
They were delusional and they're getting their (INAUDIBLE) today whose stocks are tumbling is Powell is proving that he's serious about fighting
QUEST: Paul La Monica, thank you. And the markets, we are five minutes away from the closing bell. The Dow is now off the best part of 1,000 points.
9090 points. The S&P is down around three percent. The market is off sharply.
QUEST: This is what I would -- as I said right at the beginning. This is exactly what I would have expected to happen as people decide. And we
shouldn't read too much into it. But I'll talk about that in a profitable moment, which we'll get to after this break.
QUEST: Tonight's profitable moment from the New York Stock Exchange, Jerome Powell had to prove his inflation busting credentials. That was the whole
point of today's speech. And never mind what he said about forcefully and purposefully restrictive for a longer period of time and more pain. The
thing I would take from this is, he only spoke for eight minutes. It was a short, sharp speech designed to deliver a message and that message is quite
Rates are going up. And the Fed is going to get inflation back to two percent. That's what he said. But already you heard on this program
tonight, people suggesting that the pivot will happen. You won't get there. They'll accept four percent inflation when the pain gets too great. So, I
say to you tonight, Jerome Powell has only passed one part of the central banker's test. He has actually managed to put in place the first part,
we're going to do it, we're going to do it.
But there is the second part of the test. But he must also pass too. And what is that? That second part of the test will they actually do it when
the going gets tough? That's the Paul Volcker method. That's the way you do it. And that will be the test of Jerome Powell. Will he stay the course?
The last minute of trading on Wall Street. And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in New York at the New York Stock Exchange. Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you on
Monday. "THE LEAD" is next.