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Quest Means Business
PacWest Shares Fall As It Explores Strategic Options; ECB Slows Pace Of Rate Hikes To 0.25 Percent; Tech Leaders Attend White House Meeting On AI Safety; The Coronation Of King Charles III; Debt Ceiling Showdown; U.S. Women's Soccer Fight For Equity. Aired 3-4p ET
Aired May 04, 2023 - 15:0 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELENI GIOKOS, CNN INTERNATIONAL HOST: The Dow has now turned negative for the year ahead as bank fears spook the market. The Dow Jones Industrial
average as you can see, down almost one percent, that's a loss of 310 points. Well, those other markets and these are the main events.
The US banking sector has a new problem child, shares in PacWest plunge.
The European Central Bank chief warns of more ground to cover with interest rate hikes.
And the Prince and Princess of Wales head to the pub as London prepares for the coronation.
Live from Dubai. It is Thursday, May the Fourth. I am Eleni Giokos, I am in for Richard Quest, and this is QUEST MEANS BUSINESS.
A very good evening. Great of you to join us, and tonight, a regional lender says it is exploring all options adding to concern over the health
of the banking sector.
PacWest is down more than 40 percent. It said, it is considering strategic options to maximize its value and that it is in discussion with potential
partners, as well as investors. It is down 43 percent, as you can see. Look, that sent shares in other regional lenders down as well. Zions,
Comerica, and KeyCorp are all lower as investors wonder who is next.
These losses are astronomical on share prices across the board. It has led to a new target for regulators in the game of whack-a-mole. First Republic
seem to be the last loose end after the collapse of Silicon Valley Bank started the crisis. Now with PacWest struggling, it is clearly not over
despite what Jamie Dimon and Jerome Powell said earlier this week. Listen in.
(BEGIN VIDEO CLIP)
JAMIE DIMON, CEO, JPMORGAN: The American banking system is extraordinarily sound. You know, and obviously, if going forward, you have
recessions and you know, rates going up and stuff like that, you will see other cracks in the system, but that's to be expected. The system is very,
JEROME POWELL, US FEDERAL RESERVE CHAIRMAN: Conditions in that sector have broadly improved since early March, and the US banking system is sound
(END VIDEO CLIP)
GIOKOS: Well, we've got Matt Egan with us to break it all down.
I was just looking at what PacWest was going through today. It took such a big hit that it had to hold trading a few times due to volatility. Take us
through what the major concerns are.
MATT EGAN, CNN REPORTER: Well, Eleni, I think we have to remember that banking is a confidence game. And it's possible that Jerome Powell, Jamie
Dimon and others underestimated just how much confidence has been shaken, shaken by the earthquake that was Silicon Valley Bank, right? I mean, that
bank's sudden implosion, it obviously freaked out depositors who pulled their uninsured deposits from a whole range of banks.
It also really freaked out investors who are on this hunt to try to find what other banks could have problems lurking on their balance sheet that
are being exposed by the Fed spike in interest rates. And so we see PacWest down by 43 percent today alone. That is a dramatic loss.
And it is actually -- it was even worse earlier today, I think was around fifty-one, fifty-two percent at one point. This is after PacWest says that
they are searching for alternatives. I mean, it is Wall Street lingo for they're looking for some help.
PacWest says that they're not experiencing any "out of the ordinary deposit flows," but clearly, they are under a lot of pressure. Right now, you can
see sharp losses really across the board here. And you know, it really feels like we do need something to break this cycle. Because as you noted
at the top, there's been this game of whack-a-mole from Silicon Valley Bank, Signature Bank, Credit Suisse, a lot of people thought that maybe
this cycle could be broken with JPMorgan coming into rescue First Republic.
Clearly, Eleni, that is not the case. It feels as though officials in Washington, lawmakers, they are going to have to come up with a more
comprehensive solution because the banking crisis continues.
GIOKOS: Exactly. And you know, I think there was a hope that messaging from big players would help temper that because there is a big divergence
between what Dimon and Powell are saying on health of banks, but some of these banks and regional banks are showing the strength of their deposits
and saying look, we're not sitting in a difficult situation, but that is not enough, it is not calming the markets.
EGAN: That's right. And I think that, you know, unfortunately, we don't have great insight into what is happening in deposits, right? We can only
see the minute by minute swings in the stock price. And so, it is important to separate that out.
Officials and the banks, they say that deposits have stabilized. They are not seeing these bank runs, like they saw in March, and PacWest. I mean,
they talked about how their uninsured deposits have come down as an overall percentage, and that they're not experiencing, you know, a run on deposits
And yet, investors are still deeply concerned about what the future looks like for really this entire sector. There's just a lot of worry about how
these banks are going to really make money right now. Their cost of deposits have gone up, because the Federal Reserve is spiking interest
rates, because people are pulling their money, and they are also lending less because they're in the middle of this banking crisis. So, it's going
to be difficult for them to make money.
At the same time, the fact that shareholders had been wiped out in these other failed banks is making it harder for the existing banks to raise
extra capital. So they are in a very difficult spot, and clearly, markets are worried about how they're going to make money in the future, but also
what all of this does to the broader economy.
And Eleni, I do think that that risk of a credit crunch that ends up really slowing the economy continues to be a major concern here.
GIOKOS: Matt Egan, always good to see you. Thank you.
A former Fed vice chair says the banking crisis is reducing the need for more rate hikes.
Richard Clarida spoke to CNN Julia Chatterley earlier, and he said the turmoil was slow lending and she asked him to measure its impact.
(BEGIN VIDEO CLIP)
RICHARD CLARIDA, FORMER FEDERAL RESERVE VICE CHAIRMAN: The chair himself at the previous press conference indicated it could be worth at least a
quarter of a percentage hike, I, myself thought at the time, probably worth more. And certainly, after the events with First Republic, and especially
you have to factor in that especially the more medium size and smaller banks lend to a lot of customers who don't have access to the corporate
bond market or other markets.
And so, when those banks cut back lending, it is definitely going to have an impact on their customers who don't have other ready sources of
So, it is going to be a factor. I think, you know, getting equivalency is hard, but certainly more than a quarter of a percentage point.
(END VIDEO CLIP)
GIOKOS: Well meanwhile, in Europe, the ECB is forging ahead with raising rates. It increased its benchmark by a quarter percentage point. That's the
smallest hike since it started its cycle in July.
It comes a day after the US Fed raised rates and indicated a potential pause. Christine Lagarde said earlier that the ECB is unlikely to do the
(BEGIN VIDEO CLIP).
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: We have a target, we have a journey. We know as of today that we have more ground to cover and
whatever the decision of the Fed is in the next few weeks, months, we are going to be riveted to our objective and we will of course take into
account variables; you know, the currency for instance has an impact, any spillovers will be taken into account, but we are not Fed dependent in that
(END VIDEO CLIP)
GIOKOS: "We are not Fed dependent." Paul Gruenwald is global chief economist of S&P Global Ratings. He joins me now.
Paul, great to have you on.
Christine Lagarde saying we're not Fed dependent. We have more ground to cover. It is not over yet. That being said, I think some people within you
know the market, were expecting a 50-basis point rate hike. What do you make of what the EU's experience is going to be going forward and their
ability to temper the inflation rates?
PAUL GRUENWALD, GLOBAL CHIEF ECONOMIST, S&P GLOBAL RATINGS: Right.
Well, first, thanks for having me on the show. Well, the move today was widely expected, the 25-basis-point rise, but you're right, there were some
people expecting 50. I think it's pretty well understood now that the ECB has been a little bit behind the Fed, which itself was behind the curve.
So we are expecting a couple of more rate hikes for the ECB. Their inflation is actually higher now than in the United States. So, whereas the
Fed may be pausing, we probably have a couple of more coming from the ECB.
GIOKOS: Well, the ECB also buying fewer bonds. Look, it is trying to shrink its balance sheet. It is happening at a faster pace than previously
anticipated. And I think, there is a big concern that that could impact the banks; that that could have some kind of negative impact.
The ECB saying, look, it is working for us now. We are not foreseeing an issue, are you?
GRUENWALD: No, I think they're going to be doing this in a very measured way. And you know, you want both of the bits of monetary policy to be
rowing in the same direction. So, they want to be lifting the policy rate at the same time that they are shrinking the balance sheet.
But we know from the past couple of years that that balance sheet reduction may not always go smoothly. So, I think that's probably a yellow light to
go slowly with that. We don't know where any hiccups might pop up in the financial sector.
But I think in terms of kind of a consistent message saying they've got more work to do in there and they are working on both channels, which is
the balance sheet channel and the rate channel, I think that is probably their correct path, we would say.
GIOKOS: Look, the Fed hiking rates by 25 basis points, the feeling here is in terms of the messaging that we could see a pause. But you've got a
reality where credit conditions are starting to tighten, particularly after what we saw with SVB. We've been seeing the share prices in the financial
stocks, I mean, dismal in terms of what the regional banks are experiencing.
The prudent thing to do now is to pause given what we're seeing in the banking sector.
GRUENWALD: No, we agree with that, and the two reasons you just explained. One, is the tightening of lending standards, and the other is
the fall in equity prices. Those are tightening financial conditions.
So we're very, very sympathetic to this view that the market is going to do a little bit of the work of the Fed. The Fed may not have to go as high
because even if the Fed stays on hold, we're going to probably see tighter lending standards and soft equity prices. So I think we get to the same
place in terms of financial conditions, but maybe not with as high a Fed funds rate.
But, you know, obviously, they're going to have to watch this. We saw the hiccup with SVB in March, and a lot of the sort of financial stress
measures have reverted to February level since then. And we know we've had a big rise of rates and stuff can pop up in different sectors of the
economy. So, I think vigilance is the word. But yes, the financial conditions will tighten, probably with less work from the Fed at this
GIOKOS: Yes. Vigilance. I mean, yes, that's an interesting word.
Before I let you go, I have to ask you, in terms of your worry, that could be emerging from what we're seeing on the banking funds in the United
States and potential spillover into Europe as well. Is there contagion that we need to be aware of?
GRUENWALD: Yes. Well, we saw -- you know, we saw an episode of this back in March. And, you know, Silicon Valley Bank was a particular cocktail,
right? It was unrealized losses in the portfolio, exposure to the tech sector and a high amount of wholesale deposits.
So the system as a whole, I think we're pretty comfortable with that. But with banks that have that particular sort of configuration of risks are the
ones to watch. And again, we've had a very fast rise in rates in a very short amount of time. We're not exactly sure where the hiccups are going to
pop up in the system. But I would say that, you know, we're focusing as are others on some of the more narrowly focused regional banks at this point.
GIOKOS: Paul Gruenwald, thank you so much. Great to have you on.
GRUENWALD: Thank you.
GIOKOS: Well, the tech executives rolling out AI products were called to the White House for a chat. US officials wanting to put up some guardrails.
We will head to Washington, that's up next.
GIOKOS: Well, the age of AI is upon us and the White House is trying to set some ground rules. Today, Vice President Kamala Harris hosted the CEOs
of Alphabet, Microsoft and OpenAI, as well as the creator of ChatGPT. She told them they have a legal responsibility to ensure the safety of their
Now the Biden administration also released new guidelines on how government agencies will use artificial intelligence.
We've got Jeremy Diamond at the White House for us. Take us through some of the questioning, what the guidelines entail, and whether these CEOs are
open to listening specifically about the concerns and the dangers that are emerging within AI.
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Well, Eleni, we haven't heard from the CEOs yet, because we believe that this meeting is still
ongoing. But we did hear from the Vice President Kamala Harris, via a statement. She chaired this meeting with the CEOs of these various
companies involved at the forefront of these AI technologies. And one thing that is really notable about this statement is look, this is the beginning
of the early stages, at least of a process to try and establish some rules of the road for this emerging technology, and to also look at potential
But in the meantime, while that effort is still ongoing, one thing that Vice President Kamala Harris clearly sought to impress on these CEOs is the
need for these private companies in the absence of new regulations to act ethically, morally, and legally in a responsible fashion. She says, "to
ensure the safety and security of their products," and also noting that they should comply with existing laws.
And so I think that's an important message here that the White House is sending to these leaders, which is to say that look, regulation is clearly
still catching up with these new technologies. There are some regulations already on the books that would still apply to these companies, but in the
meantime, before those new regulations come into force, until Washington actually gets together and puts those regulations on the table, that there
is a responsibility on these companies' part.
Now today, what we also saw alongside this meeting, was announcements of some new announcements from the White House, including the fact that the
Office of Management and Budget is going to be releasing draft policy guidelines this summer, on the use of AI systems by the US government that
could potentially emerge as a template for how other companies in the private sector would treat AI.
And what we also saw was new investments to power research into AI, and its responsible use, $140 million from the National Science Foundation to
launch seven new national AI research institutes.
And more broadly, the White House is also calling for more public assessments of the existing AI technologies. And that is by having
thousands of technologists and hackers et cetera go through and test these products, not the companies, not the government, but independent actors
being able to work through these systems to see how they can be used.
So again, this is early stages in terms of the government getting involved in this, but this technology, as we know, is taking off like a rocket ship.
And President Biden himself, I'm told, has been briefed extensively on this, he popped by this meeting. And he also used ChatGPT, at least once.
GIOKOS: I mean, it's a quantum leap in terms of what we're seeing with AI, it's moving so fast. So when you're talking about guidelines and draft
policies, and then you need to get rubber stamps on that, there cannot be delays in terms of what the government is thinking to ensure that there are
some type of protections around AI.
Is there a sense that things are going to be expedited so that you know, what the government is hoping to achieve matches the speed of the growth of
DIAMOND: I mean look, I think I think the White House is sending a powerful message by having the CEOs of this company here at the White House
having the vice president lead the meeting.
The president's national security adviser, his chief-of-staff, Commerce secretary, domestic policy adviser all in the meeting, the president
himself dropping by that certainly sends a powerful signal about the importance that this issue holds.
But as we know, Washington tends to move a lot slower than the pace of technology. I mean, when you think about it, the government is still
working through how and should we regulate these social media companies? Right.
So obviously, they are too if not five, or 10 steps behind already, but certainly there is momentum to actually establish some rules of the road
here. We will see whether or not that results in regulations and legislation. But that is certainly something that the White House is
opening the door to today.
GIOKOS: Jeremy Diamond, thank you.
Well, the White House says it has no conclusive evidence about that alleged drone attack on the Kremlin, and may never fully know what happened.
Russia now says the US was involved, and that the goal was to kill Vladimir Putin. The White House has firmly rejected that claim by the Kremlin.
The Kremlin says Mr. Putin was back at work today in his office and that he has remained calm following the blast.
We've got Alex Marquardt joining us now.
Look, the US has sternly denied the finger pointing coming through from Russia, but what is the overall reaction to these accusations that have
been, you know, towards Ukraine and now pointed towards the US?
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Yes, Eleni, they have been forcefully pushing back on these accusations by the Kremlin,
because these are very strong accusations, very aggressive words coming out of Moscow that the US had direct involvement in these alleged attacks that
Kyiv was taking, was being dictated to by Washington.
Of course, Ukraine does deny this, but the Kremlin keeps pushing this line, that this was an attempt on President Putin's life, that this was attempted
terrorism by Ukraine.
Now, at the same time, this is the kind of thing that we have been hearing from Russia throughout the course of this war, that Ukraine is simply a
puppet for the US and NATO; that they are doing their bidding; that when Russia is fighting in Ukraine, they're not just fighting against Ukraine,
but fighting against the rest of NATO.
So we have seen a forceful rejection by the White House of these accusations from the Kremlin throughout the course of the day, calling what
Peskov is saying -- the Kremlin spokesman -- is saying lies and at the same time, the US side is saying that there is no conclusive evidence, that
they're still gathering information and have not come to any kind of conclusions.
Here is a little bit more of what the National Security Council's John Kirby had to say earlier today at the White House.
(BEGIN VIDEO CLIP)
ADM. JOHN KIRBY (RET), COORDINATOR FOR STRATEGIC COMMUNICATIONS AT THE NATIONAL SECURITY COUNCIL: I would just tell you, Mr. Peskov is lying. I
mean, obviously, it is a ludicrous claim. The United States had nothing to do with this. We don't even know exactly what happened here, Kaitlan, but I
can assure you the United States had no role in it whatsoever.
(END VIDEO CLIP)
MARQUARDT: Now Peskov on his call with reporters today did not offer any kind of evidence. As I noted, Ukraine has roundly denied that they were
involved at all. It is not just happening publicly from President Zelenskyy yesterday and others, but we do know, from a number of US officials, Eleni,
that there has been contact between of course Kyiv and Washington, and that they are denying it privately as well.
And I'm told by a US official that the contact that the Ukrainian government officials who they have spoken with seem surprised and caught
But Eleni, the real fear here is that no matter what happened is that Russia could use this as a pretext to escalate their attacks against not
just Ukraine, but at the heart of Ukrainian capital, Kyiv itself -- Eleni.
GIOKOS: Yes, Alex, I mean, really good point. And it just sort of makes me think that Russia's messaging has been very escalatory. They are saying
they have the right to retaliate, they said the Kyiv regime needs to be destroyed. What is the US' response to what Russia says the consequences
are of what happened to the Kremlin, and in the Kremlin's mind, they were attacked?
MARQUARDT: Well, the US has pointed to, you know, continued salvos of missiles and drone strikes all across Ukraine. Ukrainians will tell you
that it's hard to imagine any kind of escalation anyway, short of some kind of nuclear attack.
I think there is a consensus that the threat of Russia using nuclear weapons has actually diminished in the past few months for a variety of
But, Eleni, the US has been extremely attuned to the possibility of provoking Russia for quite some time. That has been an overarching concern
for the Biden administration not doing anything that would be seen by the Kremlin as being too provocative.
That's why you've seen this incremental growth in overarching concern for the Biden administration not doing anything that would be seen by the
Kremlin as being too provocative. That's why you've seen this incremental growth in the size of the weaponry that has been given to Ukraine sort of
bigger and bigger weapon systems, not given to them all at once. And of course, falling short of what Ukraine actually wants, things like F-15s and
longer range rockets.
MARQUARDT: If you take just the long range rockets, for example, they're called ATACMS. They have a range of around 300 kilometers. The US has not
given those to Ukraine, because the US fears that those would be seen as too provocative by the Kremlin, that those could really escalate the fight
if Ukraine were to try to use those against Russian targets inside Russia.
Now, the US stopped short of condemning these repeated strikes, routine strikes, regular strikes by Ukraine inside of Russia, but the US is very
clear to say that they're not encouraging or enabling Ukraine to hit Russia inside of Russia -- Eleni.
GIOKOS: Alex Marquardt, thank you so much. Great to see you.
Well, the UN says almost half a billion dollars could be needed to support people desperately fleeing the violence in Sudan even before the latest
conflict broke out, there were already pressing concerns about its economy.
The IMF regional boss told CNN's Becky Anderson that there comes a point when the priority simply has to be survival.
BECKY ANDERSON, CNN INTERNATIONAL ANCHOR (voice over): A fragile truce in Sudan, marred by outbreaks of violence. Slim hopes of two warring sides
coming to the table. Those suffering most are civilians already operating within a broken economy.
Even before the overthrow of President Omar al Bashir in 2019, Sudan's financial system had been in chaos, crumbling even more since then. A
transitional government led by Abdalla Hamdok attracted billions of dollars in international support aimed at rebuilding the country, that included $50
billion in debt relief from the IMF.
JIHAD AZOUR, IMF DIRECTOR, MIDDLE EAST AND CENTRAL ASIA: We were hopeful a couple of years ago, we were working on huge debt relief operation for
Sudan and we were expecting that this will trigger certain number of reforms that will improve the huge potential that Sudan has in terms of
resources, in terms of also large market.
ANDERSON (voice over): But that aid was suspended after security forces staged a coup, detaining Hamdok and dissolving the civilian government.
Army chief General Abdel Fattah al-Burhan took control and the economic outlook didn't just worsen, it fell off a cliff.
Currency devaluations and subsidy reforms drove up prices. The COVID-19 pandemic slowed down growth, and then, Russia invaded Ukraine and Sudan
which imported nearly 90 percent of its wheat from there or Russia took the hit.
The World Bank estimated that before the coup, more than half of Sudan's population was surviving on less than $3.20 a day, a figure that is likely
to have only become worse.
Now, the focus has shifted from rebuilding the country's economy, to survival.
AZOUR: Now, I think the priority is to protect people's lives. We have refugees, we have people that are internally displaced, and also we need
after we stabilize or after the conflict is stabilized, to see the development agencies, the agencies like the fund coming and helping a
country like Sudan recover.
ANDERSON (voice over): With no end to the fighting in sight, the country risks falling into the shadows of the international isolation it
experienced under 29 years of Omar al Bashir's rule, and if the violence does end, it will be a long and difficult path before Sudan can steer its
fortunes back on track.
GIOKOS: All right, we are going to a short break and just ahead, it is thirty work preparing for King Charles' coronation.
The Prince and Princess of Wales go to the pub as staff gear up for the big weekend.
GIOKOS (voice-over): Hello, I'm Eleni Giokos, this is QUEST MEANS BUSINESS.
When the coronation countdown is on, we'll be live outside Buckingham Palace.
And we'll be speaking to the only female led team, pushing for equity in women's soccer. Before that, the headlines this hour.
A fifth member of the Proud Boys group has been found not guilty of seditious conspiracy, as a U.S. jury has found four other members of the
group guilty over the January 6th insurrection. It's the greatest charge filed so far in connection with the riots.
A U.S. Coast Guard veteran has been charged with a count of murder and four counts of aggravated assault following a mass shooting in Atlanta, Georgia.
Police say the suspect opened fire Wednesday at a medical building, killing one woman and wounding four others. Three of them remain in intensive care.
The suspect's mother apologized in a statement and pleaded for mental illness to be taken seriously.
Musician Ed Sheeran has won a copyright infringement lawsuit in New York. He says the victory will help protect creative freedom for songwriters
around the world. The jury decided sheeran's hit, "Thinking Out Loud," did not unlawfully copy from Marvin Gaye's classic, "Let's Get It On."
GIOKOS: A pub fit for the Prince and Princess of Wales. Two days before the coronation of King Charles, William and Kate paid a visit to this
central London pub to see how it is gearing up for the big weekend.
To get there, the royal couple took public transit, chatting to workers about the big weekend ahead. Now it has been 70 years since the U.K. has
celebrated a coronation. In that time, public attitudes toward the monarchy have dramatically changed. CNN's Bianca Nobilo takes a look at the place in
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And happy indeed are the revelers who welcome Britain's coronation here in Piccadilly.
BIANCA NOBILO, CNN ANCHOR AND CORRESPONDENT (voice-over): The longest interlude between two coronations in British history, decades of
demographic, religious and societal change raise questions about the relevance of the monarchy today.
1953 was full of postwar joie de vivre and excitement about a new young queen.
UNIDENTIFIED MALE: They come to seek work in Britain.
(END VIDEO CLIP)
NOBILO (voice-over): Despite waves of historic migration, Britain in the 1950s was overwhelmingly White and Christian --
(voice-over): -- and divided along class lines in society and the halls of power.
Today three of the four great offices of state, including the Prime Minister, are from minority backgrounds. 20 percent of the population today
are from ethnic minority backgrounds too and rising. Many from countries subject to exploitation in the former British empire.
BIDISHA MAMATA, COLUMNIST: The monarchy itself has to find a respectful and humble place for itself without pretending that it doesn't have all of
its privilege, all of its history and all of its baggage.
NOBILO (voice-over): But crumbling slowly after the second world war, Britain was still stratified along class lines in the 1950s.
UNIDENTIFIED MALE: A Duchess for example wears four rows.
NOBILO: Modern Britain is in many ways allergic to the idea of inherited privilege. Society at least strives to be egalitarian. But a recent poll
commissioned by the BBC -- Britain's national broadcaster -- suggests that King Charles might have a problem appealing to young people. 38 percent of
whom said that they would support an elected head of state. And indifference might be a problem too. 78 percent said that they weren't
interested in the royal family.
UNIDENTIFIED MALE: I think it's definitely time to rethink and I know a lot of people who loved Queen Elizabeth and I don't think that that same
fondness is there for King Charles.
NOBILO: The monarch since the 16th century is also head of the Church of England. In 1953 the majority of the country was Christian.
NOBILO (voice-over): Today it is half that with a number of nonreligious and non-Christian faiths rising each year, with multifaith leaders playing
a role in the coronation for the first time.
NOBILO: King Charles who has declared himself to be defender of all faiths was honored here at Britain's largest mosque ahead of the coronation. So
could this be an opportunity for all the communities in Britain to come together?
SABAH, AHMEDI, IMAN: With Islam, we're taught a part of your faith is lauded to a nation and we know coronation is a part history of this nation.
And our citizens will respect that history.
NOBILO (voice-over): The coronation is a litmus test to how King Charles will be received by 2023 Britain and whether enthusiasm, apathy or
opposition to the monarchy will shape his reign -- Bianca Nobilo, CNN, London.
GIOKOS: Our royal correspondent Max Foster is outside Buckingham Palace, where preparations are in full swing.
I'm curious about the atmosphere and what is going on.
What are you seeing?
I hear the people are really camping out.
MAX FOSTER, CNN LONDON CORRESPONDENT: Yes, it is starting to build. Truly international crowd as well, flags there from Australia, America, different
parts of the world. These are the really hardcore fans. I have to say, Eleni, the ones that camp for days before.
But it's part of the experience for them. They all get the champagne out, they're all having a lovely time. All the tourists come, they are pretty
much the tourist attraction for the first few days. Those tourists, people coming along, taking pictures of them, in their tents.
Just getting in the mood, really. It's going to get very busy, certainly, on the day itself. As Bianca was just suggesting, we just don't know how
Charles is going to go down. He's still living in the legacy of his mother.
On Saturday, it will be the first day we really get a sense of Charles having organized his own state event and how he wants to portray himself
and how it's received.
GIOKOS: Yes, it's a really good point. Bianca said, this is going to be a litmus test. Of course, I mean, the age of social media, you see so much
online, with people either for or against.
It's spurred a really huge debate, hasn't it?
FOSTER: Well, it's interesting. His sons are so famous. His mother was so famous. His ex-wife was so famous. But people do know who Charles is around
the world, that's my experience. But they don't know much about him.
I do think that's changed a bit recently, they're trying to find out more about him. It was always going to be the case, when he became monarch,
that's what he is. That is the central figure in the British monarchy. It's always what straw in the world into a monarchy.
Who is the king or the queen?
So they want to make sense of him in that position. And he hasn't done anything, frankly, to mess up so far. And I think I among younger people,
there are those credentials he has on the environmental campaigning side, where he's genuinely seen as a pioneer, something younger people do care
Also, they don't necessarily know who Diana was. They aren't necessarily caught up in the big divorce scandal those years ago. They don't have
massive opinions on Camilla, either.
While there are older people who have very strong view about Camilla and Charles as a couple, I think a lot of younger people actually want to find
out a bit more about them.
I think it's an opportunity for Charles to re-brand, if you like.
GIOKOS: Have you got your sleeping bag ready, then, do you, Max?
FOSTER: Thankfully, I don't have to sleep. We have this, the safety of a media tent. Alongside many more, I have to say, that are really building up
here. There is definitely going to be a huge -- even if people aren't interested, they're going to be subjected to a huge amount of TV coverage
around the world.
GIOKOS: Absolutely. I think everyone's fascinated and curious. Thank you so much, Max Foster, we look forward to seeing a lot of your coverage over
You can be sure to tune in to "The Reign Begins: Charles and Camilla," on "THE WHOLE STORY" about 30 minutes from now as well, 4 pm on U.S. East
Coast, 9 pm London.
Of course, you have to watch CNN's special live coverage of the coronation on Saturday, May 6th. It all starts at 5 am in New York and 10 am in
London, right here on CNN.
Now the U.S. government could run out of money in less than a month. We'll be speaking with the policy chief from the U.S. Chamber of Commerce about
Washington's debt ceiling battle and the uncertainty it's causing. That is up next.
GIOKOS: The U.S. Treasury says it could run out of money to pay its bills in about four weeks unless lawmakers raise the debt limit. The White House
warns a protracted debt default could wipe out 8 million jobs and could crash the stock market.
The Fed chair was asked Wednesday how the central bank would respond to such a crisis. Jerome Powell said, there is little it could do to help.
(BEGIN VIDEO CLIP)
JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: No one should assume that the Fed can protect the economy from the potential short and long term effects
of a failure to pay our bills on time.
It would be so uncertain that it's just as important that we never get to a place where we're actually talking about or even having a situation, where
the U.S. government is not paying its bills.
(END VIDEO CLIP)
GIOKOS: Yes. Well, we've got Neil Bradley, the chief policy officer at the U.S. Chamber of Commerce. He joins me now from Washington, D.C.
So great to have you on. We heard the warnings from Janet Yellen, hearing Jerome Powell saying, look, there's little we can do.
Here's the thing, would lawmakers actually flirt with the possibility of a default?
Are you expecting at the 11th hour --
-- a deal to save the day as the 1st of June is looming?
NEIL BRADLEY, CHIEF POLICY OFFICER, U.S. CHAMBER OF COMMERCE: Yes, Eleni, thanks for having me.
I do expect an 11th hour deal, maybe 11 hours and 58 minutes. They may cut it really close to the wire. But I do think that lawmakers and the
president understand the consequences of a first-ever default.
So I do think we'll find a way of resolving this. For our part at the U.S. Chamber, we're just trying to make sure that we're moving these
negotiations along because what we don't want to do is have an inadvertent default, where we think we're coming together on a deal and there's a last-
Then, for some reason or another, Congress fails to increase it. That would be catastrophic.
GIOKOS: Absolutely, look, its reputational damage at a global level. There's local impacts. I mean, this is widespread.
Worry that you have to take into consideration. I was looking back, historically, in terms of when things really got sticky. My producer
reminded me of what happened with Bill Clinton in the '90s. There were major spending cuts that came into play as well.
Are you anticipating that spending cuts are going to be a reality in these negotiations?
That there's no way out of that?
BRADLEY: They should be. They should be on the table. Frankly, we do need to reduce federal spending. The size of our budget and our budget deficit
is simply unsustainable. So it's reasonable that a debt limit increase would be attached to spending restraints. It's not just the case that that
was done a few years ago when President Obama was president, it was done during Clinton's time. You can go back even further, the 1980s, Ronald
Reagan and a Democratic Congress haggled over a debt limit increase and on deficit reduction.
So this is nothing new. We have just been getting a lot closer to the X date where we would actually default in recent years than we have in the
GIOKOS: Yes. We don't have much time. But I do want to talk about Title 42. It is set to expire next week. You've been very vocal about critical
workforce shortages. You're also calling for action to deal with the border crisis.
What are you anticipating?
What do you expect in terms of action?
BRADLEY: The expiration of Title 42 directly points as to why we've had over 430 business organizations in the United States, calling on Congress
to take action this year to do two things: to secure the border and reform our broken legal immigration system.
So we've had enough talk, we've had enough blame going on between the parties. It's actually time to find solutions.
And there are common sense solutions that both sides can agree on that would make real progress in both of securing the border and reforming an
immigration system, to make sure that American businesses have access to the talent and the workers they need.
GIOKOS: Neil Bradley, thank you very much for joining, us it's great to have you on the show.
BRADLEY: Thank you having me.
GIOKOS: Female owned U.S. soccer teams are blazing a trail for equity in women sports. Next, we're going behind the scenes of Los Angeles'
professional team, Angel City, it is in its second year. It's building a dedicated fan base and giving back to the community.
GIOKOS: There are just moments left to trade on Wall Street. We will have the final numbers and the closing bell, right after this.
GIOKOS: Concerns about the health of U.S. regional banks are weighing on Wall Street. The Dow is down almost 300 points. It's headed for a fourth
straight losing session. It has been major pressure for the markets in terms of what's happening on the banks.
Looking a little closer at the Dow components right now, Disney is at the bottom. It's coming under pressure, as you could see, down 3.4 percent.
Bank stocks are sharply down as well. Goldman Sachs is 2 percent lower; JPMorgan off a little more than 1 percent.
Apple reports in an hour. Be watching those numbers. It is down 1 percent right now. That's it for QUEST MEANS BUSINESS.