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Quest Means Business

U.S. Consumer Prices Ease for 10th Straight Month; Biden: The Whole World is in Trouble if U.S. Defaults; Tucker Carlson Finds a New Home at Twitter; Representative George Santos in Federal Custody; Japan in Talks to Open NATO Liaison Office; Tourism in Malta; UAE Ramping Up Renewables. Aired 3-4p ET

Aired May 10, 2023 - 15:30   ET



ELENI GIOKOS, CNN INTERNATIONAL HOST: A divided day on Wall Street. The Dow is down a little over half a percent. Many people are rotating back into

tech stocks as you can see, those are rising. The NASDAQ is up around one percent. Dow is down 0.4 percent.

Well, those are the markets and these are the main events US inflation continues its gradual slowdown in new April data.

Former Fox host, Tucker Carlson says he will relaunch his show on Twitter.

And Airbnb shares tumble on concerns customers are tightening their belts. Live from Dubai, it is Wednesday, May 10th. I am Eleni Giokos, in for

Richard Quest, and this is QUEST MEANS BUSINESS.

Well, a very good evening. Great to have you join us.

And tonight, the medicine is working just not fast enough for some investors. The Dow has been lower most of the day despite the latest sign

the Feds' rate rises are cooling off inflation. Now, consumer prices rose just 4.9 percent over the 12 months ending in April. That is the lowest

headline rates since April 2021.

Now it is a bit less than economists had expected, but there are concerns that the hardest part of the inflation fight lies ahead as price of things

like shelter, food, and new cars rise sharply. That is in the report.

We've got Matt Egan to break down all the numbers. I mean, there are a few bright spots where you're seeing, you know inflation taming. But you've

also got significant rises on important elements like we've said shelter that was up just over eight percent. Major concern not so much on gas, and

fuel but more so on energy supply.

It is really interesting to see sort of the juxtaposition of what is coming up and what is actually able to take off the heat on the inflation front.

MATT EGAN, CNN REPORTER: Well, Eleni, you know, this is the best inflation report in a year, actually two years really when you look at it and we've

seen annual price increases cool off for 10 straight months, which is great at 4.9 percent. This is miles away from the peak last summer over nine

percent, but some of this improvement has really started to slow down.

It has kind of leveled out on an annual basis and it has leveled out, as you can see on the chart well above the two percent level that the Fed is


On a month-over-month basis, it has been pretty choppy. We actually saw inflation heat up between March and April, although a lot of that was

driven by a spike in used car prices and that spike is not expected to continue.

Investors and economist, they're focused on the fact that shelter while shelter costs are still going up on a monthly basis, we have actually seen

the smallest increase for shelter in a year. That's very important because shelter is a huge part of people's budgets.

You know, digging further into the report. There were some other positives, we saw record annual drop for major appliances, for health insurance. The

other hand, car insurance is going up very dramatically and this one is painful to me as a parent, the price of day care and preschool that is

increasing at the fastest rate since the government's been tracking.

GIOKOS: Yes. That is absolutely painful, Matt. I mean, look, the point is you want to see the tightening cycle, impacting inflation and impacting it

quickly enough.

The Fed, I guess signaled that they would pause the interest rate hiking cycle if inflation was, you know, coming down at the rate that they


Is this aligned with what the Fed is thinking in terms of what the target rates should be as we wait for the economy to cool down?

EGAN: Yes, economists and investors do think that today's inflation report very much keeps alive the ability for the Fed to pause at the next meeting

in June.

At last check, markets are pricing in a 99 percent chance that the Fed does absolutely nothing at the June 14th meeting. That is up from 79 percent a

day ago.


EGAN: So this hope of a Fed pause is very much in play. Another question, though is, could the Fed actually cut interest rates, and at last check,

the market is pricing in now a 44 percent chance of a rate cut in July.

But, you know, we're still not anywhere near the two percent target for inflation, and I talked to billionaire investor David Rubenstein, and he

said he thinks it would be very premature for the Fed to start cutting the interest rates.

He said that the Fed would actually look "silly" if they started cutting interest rates at inflation at these levels, because it could actually end

up fanning the flames of inflation by making investors think that it's going to come back. So yes, a pause could still happen.

One other point, though, here, Eleni. We still have another inflation report and one more jobs report coming out before the Fed meets on June

14th, and so a lot can change before that.

GIOKOS: Absolutely, and it is all in the numbers.

Matt Egan, thank you so very much. Good to see you.

Now, for the first time since the Fed began its crusade against inflation, the pace of price rises has dipped below the central bank's target interest

rates after 10 consecutive rate hikes in just over a year.

Take a look at this graph. As much as mentioned, the Fed is widely expected to take a breather, but speaking on Tuesday, the chairman of the New York

Fed said it could take time for high interest rates to take effect, and more rate rises might be necessary to get inflation back down to that two

percent targets.

Tiffany Wilding is a North America economist at PIMCO, she joins me from Newport Beach, California. Great to have you on.

That was a really interesting graph. I mean, finally, seeing that inflation and what we're seeing on the interest rate front converging, you're not

sitting in negative real interest rates anymore. And I guess the question is, are the high interest rates impacting inflation as quickly as the Fed

had hoped?

TIFFANY WILDING, NORTH AMERICA ECONOMIST, PIMCO: Well, I think funny enough, so you guys have mentioned, you've seen the year-over-year rate of

inflation come down. So from nine percent, to I think five-and-a-half percent on a year over year basis.

Today, you know, what I would actually argue that that had very little to do with the five percent increase in the Fed funds rate over the last, you

know, call it a year-and-a-half and that is because monetary policy works through long and variable lags, and you know, and we did have, you know,

pandemic-related supply constraints, as well as just, you know, the pandemic-related response, the fiscal policy response, which was a one-off


You know, those were kind of one off factors that were reducing inflation. Those have more recently gone away, and I would argue, that's the reason

why inflation has come down.

More recently, and we haven't seen the full effects yet of monetary policy because of those long lags.

You know, so as we continue to see inflation, or we expect to continue to see inflation coming down, that is really going to be more about monetary

policy. And so I think that's why you hear Jay Powell talk about the uncertainty, you know, we could need to do more if inflation doesn't come

down as much, or we could we made -- you know, we may need to be cutting as the market suggests, because we did too much already. And that's something

that's going to -- that's a debate that's going to play out.

GIOKOS: But as early as July, cutting as early as July, as Matt was saying that, you know, there's a 44 percent chance at least, that's the

probability that's out there. That sounds and feels a bit too soon.

WILDING: Yes, I mean, we would agree with that as well. You know, we -- so we do think you are probably going to see a recession in the United States

later this year, albeit a mild one, starting later this year.

You know, and again, that's just because of the amount of monetary policy tightening that we've seen to date. And, of course, that has had, you know,

an impact on the banking sector. You know, we've seen a rising cost of capital for banks, stock price declined, I think, 30 percent on average

across the banking sector. That's going to make it more difficult for them to make loans.

And that's going to -- that's going to ultimately cool off the economy and bring down inflation in our view. But nevertheless, inflation is still

elevated today, it's probably going to still be elevated in July. So we would completely agree that probably the Fed is not going to be cutting

rates when inflation is still this much above their target.

GIOKOS: Yes, you know, the whole issue about whether the two percent target range is actually realistic? Is it time for, you know, casting a wider net

and looking at an overall range, say between two and four percent? Do you think that will be on the cards at some point?

WILDING: Well, I mean, I think there is a lot of credibility -- potential credibility issues if the Fed were to move the goalposts on its inflation

target while inflation was still elevated, right, you know they're basically then saying well we can't hit our two percent target, so we're

just going to raise the two percent target.


So there's potential credibility issues there, but nevertheless, I think they could keep that formal two percent target, you know, but do kind of

what they did in the 90s. They can be okay with a little bit of an upside miss, you know, kind of three percent maybe, you know, be okay, with an

upside miss for a little while knowing eventually, it could get back to two.

You know, one thing that people forget about Volcker, by the way, and Powell is wanting to always channel his inner Volker is that Volcker didn't

bring inflation down to two, he actually brought it down to four percent and it wasn't until 20 years later, two recessions later that it went to


GIOKOS: Okay, so I -- you know, very quickly, I want to talk and you mentioned, potential of recession later this year. What about other

externalities, you know, geopolitical issues, I think top of mind globally, if you see any other shock on commodity supplies, and that could, of

course, impact inflation down the line.

It doesn't seem that there's a buffer here to be able to protect the United States. Inflation is at risk.

WILDING: Yes. I think that's absolutely right. I mean, usually you think about supply side shocks, like you're talking about as stagflationary,

where you have inflation that is rising again, and real growth, that's, you know, you know, decelerate or even declining. You know, I think that's the

real scenario here that's really problematic for the Fed, because they can't -- they probably can't cut because inflation would still be elevated.

You know, and that's usually recessionary periods, usually a time when they do need to be cutting.

GIOKOS: Tiffany Wilding, great to have you on. Thank you so much for your insights.

Oh, inflation isn't the only specter hanging over the US economy. Moody's rating agency says the prospect of a US government default is now a real

threat. Speaking in the last hour, President Biden said Republicans are holding the economy hostage. It comes a day after a critical meeting with

lawmakers ended without any significant breakthroughs.

Mr. Biden said the United States reputation is now on the line.


JOE BIDEN, PRESIDENT OF THE UNITED STATES: And I've traveled the world, I've met with over 80 heads of state -- 80 heads of state so far, they all

are looking at me. Are you guys serious? No, no, I'm serious. Because if we default on our debt, the whole world is in trouble.


GIOKOS: Well, Jeremy Diamond is at the White House for us. This is a 2011 deja vu. I mean, listening to what President Biden is saying and hearing

that Moody's is saying, look, this is a real threat and we all remember the credit rating downgrade that came over that period. Are we going to see a

breakthrough? Is there optimism that the two sides can get to a decision?

JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: I mean, the only person who seems optimistic is the president. And that's simply because he says he's a

born optimist. But other than that, I mean, there was not much in the way of actual substantive progress from this first meeting yesterday, which we

should note this first meeting between the congressional leaders and the President came just over three weeks before what could potentially be the

first ever default in United States history.

And that's because both sides essentially reiterating -- reiterated each other's positions, the president maintaining that he will only accept a

clean debt ceiling increase and he will only negotiate on spending as part of a separate agreement. The House Speaker making clear that he believes

spending cuts need to be part of raising the debt ceiling.

And so what we're in the process of right now is two things. On the one hand, here at the White House, we're expecting White House officials,

congressional staffers to get together in a room and actually try and begin hammering out the contours of what could potentially be a deal on a


And then what you have at the same time is the President going out there, as he did today in New York trying to ramp up the pressure on House

Republicans by warning about the catastrophic consequences of default.

Interestingly, he did so just outside on the outskirts of the districts of Congressman Mike Lawler, who is one of 18 House Republicans who hails from

a district that voted for President Biden in 2020. And this is clearly part of a strategy by the White House to try and chip away at some of Kevin

McCarthy's support. He has a very, very slim majority in the House that he is dealing with.

As of now, all 18 of those Republicans have stood by McCarthy and his position. They voted for that bill a couple of weeks ago, that would both

raise the debt ceiling, but also impose some pretty severe cuts on federal spending. And so the White House is looking to try and chip away at that


And so what you have here is two tracks. On the one hand, the negotiations that are actually happening behind the scenes, and at the same time, both

sides -- the president's and McCarthy on the other side, trying to inflate into the public debate around this so that if we get to the brink here,

that there is a clear sense of the political consequences as well.


But of course, what is more important are the potentially devastating economic consequences that you know, well, Eleni in terms of the potential

for millions of job losses if you have something like this continue, Social Security payments, Veterans Affairs, benefits, payments not going out. This

is a really serious situation. And right now, we are only in the early, early stages of these negotiations.

GIOKOS: Absolutely. Everyone is telling the potential consequences and what it could mean and it doesn't look good.

Jeremy Diamond, great to have you on. Thank you.

Well, after being ditched by Fox News, Tucker Carlson says his show has found a new home on Twitter.

The platform's owner, Elon Musk says he did sign a deal to lure the right- wing firebrand to the site. That is coming up next.


GIOKOS: Former Fox News host, Tucker Carlson has found a new home on Twitter. Two weeks after being ousted by Fox, the right-wing commentator

says he is really launching his program on the Elon Musk-owned platform.


TUCKER CARLSON, FORMER FOX NEWS HOST: Amazingly, as of tonight, there aren't many platforms left that allow free speech. The last big one

remaining in the world, the only one is Twitter, where we are now.

Starting soon, we'll be bringing a new version of the show we've been doing for the last six-and-a-half years to Twitter.


GIOKOS: Musk responded to Carlson's announcement saying we have not signed any deal of any kind whatsoever. Tucker is subject to the same rules and

rewards of all content creators.

Musk has also tweeted about new changes coming to Twitter. He's adding encrypted messaging to the platform and says calls will soon follow. That

will put Twitter in direct competition with Mark Zuckerberg's Meta, which owns Facebook, Messenger, and WhatsApp.

And the move comes as Musk searches for growth, advertising revenue has plummeted since he took over six months ago.

CNN tech writer, Clare Duffy joins me now from New York.

Clare, so much news around Twitter. Let's start around Tucker Carlson, really fascinating. He is saying that's his new home. It's his new


Tell us about how he plans to do this. Do we know how he's going to be posting or you know, launching his new show on this platform?

CLARE DUFFY, CNN BUSINESS WRITER: It is an open question. I mean, we haven't heard a lot about exactly what this show will look like whether it

will be a Twitter spaces or whether he'll just be sort of vlogging on the platform in a lot of ways, that's what it sounds like especially when you

have Elon Musk with his very, sort of not such a warm welcome for Tucker saying we have not signed any kind of deal. He's going to be subject to the

same rules as any other creator on the platform.

And so it'll be interesting to see exactly how this plays out, and how Twitter might enforce rules if Tucker starts to break them when he's doing

these kinds of things.

You know, it seems like a real sort of, you know, risky situation for Twitter and a lot of ways because Tucker Carlson has a big audience, but

Tucker Carlson has also long been avoided by mainstream advertisers, which are exactly the advertisers that Twitter is trying to attract back to the

platform since Musk's takeover.

GIOKOS: Before I let you go, look, Twitter wants to launch into encrypted messaging, phone calls, and we know the sort of the big aim for Elon Musk

is to create a super app similar to what we see in China like WeChat. Is this the start of that strategy, would you say?

DUFFY: I mean, I think we'll have to see, Musk said that the first version of these encrypted messages would be rolling out today. We have yet to see

anything on that yet so far. And so you know, Musk has a history of making these big promises of changes on the app, and then it takes a little while

longer for them to roll out.

And so I think it's sort of a wait and see moment, but certainly it is an interesting move for Twitter away from being sort of a public conversation

to facilitating some of these more private conversations that could put Twitter in competition with Meta's apps, for example, as you said in the


So it is an interesting move, but whether this is something that Elon Musk is going to be able to make money off of as he continues to try to grow

Twitter's business, I think is really an open question here.

GIOKOS: All right, okay, Duffy, thank you so much.

But I also want to bring in CNN senior media reporter, Oliver Darcy, of course, we were just talking about Tucker Carlson, with Clare, so many

questions about how he is going to be using Twitter as his new platform.

We knew he was going to search for a home. We knew it was going to be on social media in some form, we just didn't know where.

OLIVER DARCY, CNN SENIOR MEDIA REPORTER: Yes, I'm not even sure that we knew it was going to be on social media. I mean, he had these outstanding

offers from other companies like Newsmax, which would really love to have him on the platform and really challenge Fox News, but Tucker Carlson, he

ended up going with Twitter, which I think is quite interesting.

I mean, this comes of course, after he hosted Elon Musk for one of his final major interviews on his Fox News show before being fired, and we know

from reporting from other outlets that they too, were talking and in conversation.

So I find it very interesting that he decided not to go to Newsmax, not to go to a right-wing social media site like Rumble, but to go to Twitter and

relaunch his show exclusively on Elon Musk's platform.

GIOKOS: Oliver Darcy, great to have you on. Thank you.

Well, in just a few hours, Donald Trump, the Republican frontrunner in the 2024 presidential race will appear on CNN townhall in New Hampshire. It's

the former president's first appearance on this network since his 2016 campaign.

It comes one day after a jury found him liable for the sexual abuse and defamation of writer E. Jean Carroll. He has been ordered to pay her $5

million in damages. Miss Carroll to the verdict on "CNN This Morning."


E. JEAN CARROLL, PLAINTIFF: The old view of what the perfect victim looks like, totally changed.


CARROLL: The old view of the perfect victim was a woman who always screamed, a woman who immediately reported, a woman whose life is supposed

to fold up, and she's never supposed to experience happiness again. That was just shut down.

This verdict is for all women. This is not really about me. It's for every single woman.


GIOKOS: Kristen Holmes joins me now from Goffstown, New Hampshire. Great to have you on.

In just a few hours, we are going to be hearing from former President Trump and here is the thing, this comes a day after this verdict. It is an

important verdict. It really sends an important message.

He is going to have to field many questions around this and a lot of other issues that he is facing with the law.

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Yes, that's right and he is anticipating that both he and his team, they are trying to prepare reaction

to that verdict. And the thing that we're really watching for is also how the audience reacts.

Remember, this is a live audience and it is filled with Republicans or Republican-leaning independents, people who plan on voting in the GOP

nominating process, the primary. So how do they react to the verdict? Do they care about this part of his legal past because as we've seen for so

many of these other legal situations that he has been in, Republicans seem to not really care when it comes to Trump and any kind of legal



But of course, this being a verdict, being liable for sexual abuse could change that narrative.

Now, in terms of preparation for tonight and questions we expect to be answered, I am told by Trump's advisers that it's really hard to do any

sort of intense prep with Donald Trump, that he believes he is ready, that he goes in there and he is going to say what he's going to say.

But they are hoping he does is stay on message. And again, that is something that we're going to be watching closely. Let's just remember the

reason that we're doing this townhall is because he is the frontrunner in the Republican primary. He has to answer questions to Republican voters and

that's why they Trump's team agreed to do this townhall.

They know that Trump is going to have to get votes from outside of his base, outside of his conservative bubble, and they are doing that by

outreach, whether it be smaller events. We've seen Trump doing these retail stops on the campaign trail talking to voters directly or through something

like this, like a townhall on a network that he is not necessarily the most friendly to him the way that we have seen the other interviews that he has

done with Fox News, with other conservative media, and that's how they are hoping to reach out to voters.

And that's what we are really looking to see tonight. How do voters react to Donald Trump? And what questions do they have for the former president?

GIOKOS: All right, Kristen Holmes, great to have you. Thank you.

Well, US Congressman George Santos was in a federal courtroom a short time ago. He pleaded not guilty to 13 charges, including money laundering and

fraud, and is being released on a half-a-million dollar bond. We're heading to the courthouse next.



GIOKOS: Hello. I'm Eleni Giokos and there's more QUEST IN BUSINESS in a moment, when a U.S. lawmaker know of his habit of lying of lying has now

been charged with fraud. We will be outside the courthouse with a live report.

And we will be speaking to the Malta tourism minister about its hopes to get visitor numbers back to the pre-pandemic levels.

Before that, this is CNN. On this network, the news always comes first.


GIOKOS (voice-over): Pakistan's prime minister is calling people protesting in support of Imran Khan terrorists. Khan said in a court hearing earlier

that he has been tortured and beaten by police after they arrested him on Tuesday.

Khan's detention has led to deadly confrontations between police and supporters of the former prime minister.

The head of the Wagner group says a Russian brigade has fled the Bakhmut area. As a result, Yevgeny Prigozhin said Ukraine has retaken territory and

threatens to encircle his private military. He also claims the Kremlin has not supplied his fighters with promised ammunition.

(INAUDIBLE) newspapers apologized to Prince Harry on the opening day of a civil trial over phone hacking. In a court filing, (INAUDIBLE) acknowledged

snooping on the prince, saying he was entitled to compensation. A lawyer for Harry and other claimants said the newspaper group got information

illegally for years.


GIOKOS: Authorities say several locations in Israel were hit by rockets fired from Gaza. It comes as Benjamin Netanyahu says Israel's military

campaign against Islamic Jihad operatives and infrastructure will continue. Palestinian officials say at least six people were killed in Gaza following

Israeli airstrikes on Wednesday.

The Israeli defense minister says Gaza militants have fired more than 400 rockets at Israel. Hadas Gold is in Jerusalem for us.

Tragic scenarios playing out. I want to talk about what you've heard in terms of civilian loss of life.

What the response from the Israeli side has been?

HADAS GOLD, CNN INTERNATIONAL CORRESPONDENT: Well, Eleni, today we know that at least six people, Palestinians, have been killed in Gaza. One of

them, we, know was a child. The Israeli military saying that they have been targeting, specifically, Islamic Jihad targets, things like weapons

manufacturing sites.

They say that they targeted a group that was on their way to try to launch rockets or anti tank missiles. When we asked about the civilian casualties,

they say a few things. First of all, they say that they are never directly targeting civilians.

They have suggested that some of the rockets, 65 or so rockets that have fallen short of Gaza Strip, could be a contributing factor. They do

acknowledge, at least, in that initial strike that killed those three Islamic Jihad commanders, that there were civilians, including family

members of those commanders killed as a result.

They essentially say we were trying to strike, what they called terrorists who hide among civilians, among their families. They always try to avoid

what they called, collateral damage.

But it was an unfortunate effect they say of how the Islamic Jihad operates. That is where we stand right now. But as we stand, Eleni, we know

continuous airstrikes are going on in Gaza, continuous rocket fire being fired from Gaza into Israel.

We know that the airstrikes in Gaza are now targeting certain buildings. We have heard from people on the ground now that there are warnings for -- by

the IDF for certain people to evacuate buildings. In the last few minutes they have targeted, what they, called a command center.

Apparently one of these buildings. In Israel we are hearing about damage being caused by these rockets. No injuries yet reported by the direct

rocket fire. People have been injured while running to shelters and the like. But no injuries yet although they have damaged some buildings and

some cars.

There have been swirling reports, confirmed reports, that the Egyptians are working on a cease-fire. We have confirmed with Israeli officials Egyptians

are working on a cease-fire.

A few hours ago that seemed to be, potentially, close, potentially there was good conversations going on around the cease-fire, the rocket fire and

the airstrikes have continued. It is not clear where that potential cease- fire stands.

We just heard from Benjamin Netanyahu, the prime minister, in the last hour or two hours or so. He made no mention of a cease-fire. He is actually

warning Israelis that this operation could and will continue, he said, as necessary.

GIOKOS: Hadas Gold, thank you for that update.

U.S. Congressman George Santos has pleaded not guilty to 13 federal charges. The New York Republican walked out of court a short time ago on a

500,000 dollar bond. He is accused of wire fraud, money laundering, stealing public funds and lying to the House of Representatives.


GIOKOS: Here is a bit of what he said to the media.


REP. GEORGE SANTOS (R-NY): Look, this is the beginning --


SANTOS: -- address and defend myself. We have an indictment. We have all -- we have the information that the government wants to come after me on. And

I'm going to comply. I have been complying throughout this entire process. I have no desire not to comply at this point.

They have been gracious in there. Now I'm going to have to go and fight to defend myself. The reality is, it is a witch hunt because it makes no sense

that, in four months, four months, five months, I'm indicted.


GIOKOS: CNN law enforcement reporter Mark Morales joins us now from outside the court.

There has been so much scandal around George Santos over the past few months. So much untruth, right, in terms of his messaging, in terms of what

people have been trying to corroborate, some of the things he's been doing and saying. Now he is unveiled.

What is the next step for George Santos?

He seems defiant.

MARK MORALES, CNN LAW ENFORCEMENT CORRESPONDENT: What we really saw here was the dichotomy of what is going on here, a more subdued, controlled,

George Santos, answering questions as he was asked in the courtroom.

"Yes, ma'am," "Yes, Your Honor," to all very procedural questions. You juxtapose that to what we saw a little bit ago, him walking out of the

courtroom surrounded by a gaggle of reporters insisting that not only was he not going to resign but saying he was taking shots at the investigation.

This months-long investigation that was done by a combination of the FBI, the Department of Justice, culminated to where we are today, with this 13

count indictment. The next step for George Santos is he has to get, as part of his bond agreement, where he is allowed to be released, a 500,000 dollar

bond. He needs to find -- he has two out of three people who are willing to post this. Bond they need to have the last person out by the end of the


Another condition, a key condition to the bond is he is allowed to travel to New York City, Long Island and Washington D.C. If he wants to travel

anywhere else in the continental United States, he needs to get permission from pretrial services.

That is significant because, as he said in this gaggle, as he's maintained on social media, he intends to run for reelection. If he wants to do that,

say, for instance, in a different state, he wants to go to a fundraising event, he is going to need the ability to go do that. He will be back in

court on June 30th. And we will see where things go from there.

GIOKOS: Mark Morales, great to have you on. Thank. You

Japan is working to bolster its security in the Asia Pacific region. The company's foreign minister spoke exclusively to CNN, saying Japan could be

opening a NATO liaison office, which would be quite unprecedented in Asia.

NATO officials say discussions are ongoing. But no decision has been made. Marc Stewart has the story in Tokyo.


MARC STEWART, CNN INTERNATIONAL CORRESPONDENT (voice-over): The war in Ukraine and Russian aggression is prompting Japan to discuss opening a NATO

liaison office, the first of its kind in Asia.

YOSHIMASA HAYASHI, JAPANESE MINISTER FOR FOREIGN AFFAIRS: The reason why we are discussing about this is that, since the aggression by Russia to

Ukraine, the world become more kind of unstable crisis (ph). And if it would like something happened in East Europe, it is not only confined to

issue in East Europe.

And that affects directly, too, the situation here in the Pacific.

STEWART (voice-over): Japanese foreign minister Yoshimasa Hayashi also highlighted North Korean missile launches and called China the greatest

challenge for security.

STEWART: Is this to send a message to perhaps China or to North Korea that there is strength in numbers?

What would the intention of this be?

HAYASHI: Yes, discussion is not intended to be sending a message to any specific countries but, as I said, you know, security embattlement (ph) we

are facing is becoming more and more severe and also complex.

STEWART (voice-over): His remarks come after Japan announced a new national security plan last year, which would see the country double its defense

spending, moving away from its pacifist constitution in the face of growing threats.

Even though an agreement between NATO and Japan is far from complete, NATO's potential presence in Asia is already drawing criticism from China.

A government spokesperson said, "Asia is an anchor for peace and stability and a promising land for cooperation and development --


STEWART (voice-over): -- "not a wrestling ground for geopolitical competition."

Yet Japan's foreign minister reiterates that such a move would not escalate tensions in the region.

STEWART: Do you worry that the alliance building would create more attention in the Pacific region?

HAYASHI: We are not offending anyone. We are defending ourselves from any kind of interference and concerns and, in some cases, threats.

STEWART (voice-over): As allies convene in Hiroshima for the G7 summit next week, maintaining stability in an increasingly volatile region remains at

the top of the agenda -- Marc Stewart, CNN. Tokyo.



GIOKOS: European travel companies say they're expecting a busy summer when it comes to tourism. Malta is thinking as much about quality as it is

quantity. The country's tourism minister joins me. That's coming up next.




GIOKOS: Shares in Airbnb took a hit after its CEO said travelers are looking for cheaper options. It's down around 10 percent since Tuesday's

earnings call. The company says it expects fewer bookings and lower rates this quarter, particularly, in the U.S.

Meanwhile, in Europe, the travel firm tree (ph) says it's expecting a robust summer. That message shared by several European airlines, which say

bookings are strong for the upcoming season.

It's good news for Malta, which has seen tourism bounce back since the pandemic; nearly 2.3 million people visited last year. It is still has a

way to go to get to pre-pandemic levels. Those 2022 numbers were only 83 percent of what we saw before COVID.

As Malta looks to bring people back to its beautiful coasts, the country says it's renewing its focus on sustainability. Clayton Bartolo is the

Maltese tourism minister and he joins me now from Malta.

So great to have you on. Welcome to the program. You've just come off a really fantastic first quarter. I was looking at your numbers. You've

already had 440,000 visitors from January to March.

Are these record numbers that you've experienced thus far?

CLAYTON BARTOLO, FORMER MALTESE MINISTER FOR TOURISM: Good evening, Eleni, to you and all your viewers this evening. Yes, in fact, at the moment, we

just announced --


BARTOLO: -- the first three months results quarter one of this year, which is in fact an all-time record for Malta in tourism history.

We've experienced a record in terms of the number of visitors, which as you mentioned, we surpassed 440,000 number of visitors. It is, in fact, a 4

percent increase over the number we had in 2019, the last couple of years.

We've also experienced an increase of 4 percent in the number of guest nights in Malta. Most importantly of all and significantly is the spend

which these tourists have done in Malta. The spend has topped 312 million in three months. It is, in fact, an increase of 15 percent, when compared

to 2019. I will also say that, significantly --


GIOKOS: So tourists are spending (INAUDIBLE) --



GIOKOS: -- about your markets, I know that it's like U.K., France, Italy, Germany. And we just hope heard from Airbnb that's really worried about

people wanting to spend less in the U.S.; Europe seems a bit better.

But what is your experience in terms of the ability of consumers to have the discretionary spending to travel and also spend while they're on


BARTOLO: Actually, here in Malta, we are experiencing something which is different. We're offering quality and (INAUDIBLE) for money. Two things

which I do believe every tourist will be looking for and it is something that Malta is offering.

When we say that the tourist spend (ph) has increased when compared with 2019, it's not just the package tourists but it's even the tourists, the

free independent traveler, who's spending more money here in Malta. There the spend is actually much larger than what it used to be.

And I do believe that we are managing to do this, because we've taken up all the opportunities, which the pandemic, ironically, provided us with.

Now we have introduced new niches, such as sports tourism, which only, in the first three months of this year, it provided us over 16,700

(INAUDIBLE). So (INAUDIBLE) this niche, which is fairly new to Malta, is already spurring us on (ph).

GIOKOS: (INAUDIBLE) tourism accounts for around 15 percent of your GDP. It is astronomical. And it's really fascinating to see how you've been

marketing yourself lately.

I was just curious about the cruises and cruise tourism. That's also big. But it also is a heavy carbon emitter. You're also very much talking about

wanting to be more sustainable and environmentally friendly.

How do you marry cruise tourism with that agenda?

BARTOLO: Cruise tourism is already on the increase. As of the first three months of this year, we've already seen 21 cruise ships which have stopped

here in Malta. And sustainability is key for us. First of all, want sustainability for the industry as a whole. But we also want to ensure

environmental sustainability.

And with regard to the cruise liners, we are working on a new project, which is the shore to ship project, whereby ships which come in dock in the

grand harbor here in Malta, when this project is ready, they will be able to switch off their engines and start taking electricity from the grid,

meaning, there will be lower emissions in the grand harbor area and, at the same time, the ships can continue to come here for the passengers to

continue enjoying our beautiful islands.

It is something which we are also replicating all over the island. We do believe that sustainability is key and (INAUDIBLE) working to ensure the

sustainability and tourism are not competitors but they are sustainable partners, which go hand in hand together.

GIOKOS: Minister, great to have you on. I have to confess, I have not been to Malta. it is now officially on my list. Great to have you on.

BARTOLO: You have to visit. Thank you. Thank you.

GIOKOS: I will.

So the UAE and the U.S. are teaming up on climate change. Up next, my interview with the UAE climate minister, who's at the summit where it's all






GIOKOS: It is the final day of the Aim for Climate summit in Washington, D.C. The event is part of an alliance between the U.S. and UAE, which

focuses on bringing together tech and agriculture in the fight to halt climate change.

The group has acquired over 500 partners and $13 billion in investments since it was formed two years ago. I spoke to the UAE's climate minister;

she shared her priorities in what her country has in store when it hosts COP28 later this year.


MARIAM ALMHEIRI, UAE MINISTER OF CLIMATE CHANGE AND ENVIRONMENT: We need to ensure we reach 43 percent of reduction in greenhouse gas emissions by

2030. That's the ultimate goal.

So for me, I believe in a two-pronged approach that we need to push toward. We need to phase out oil and gas emissions, so fossil fuel emissions. And

we need to ramp up, as quickly as possible, the renewable space.

And while we do that, that's kind of the bridge and the just transition we're always talking about, to then reach hopefully a world where -- go


GIOKOS: Sorry, minister; when you say phase out of emissions, oil and gas emissions, you mean decarbonizing oil and gas?

It's not phasing out oil and gas.

Do you believe that oil and gas still has an important role to play in our energy mix?

Because this is an important delineation.

ALMHEIRI: It does, because we are not ready yet. If you look around us, the financing is missing. The financing is missing for so many countries to

make sure that they have enough renewables to be able to cover their energy security.

So it's really important that we understand that, this transition, this just and pragmatic tradition that we all have to push toward, needs to have

a ramp-up of clean and renewable energy.

How are you going to build your solar panels?

How are you going to build your wind turbines?

You need energy for that. So therefore, fossil fuels will still need to be there for the foreseeable future, foreseeable time. Until then, we need to

decarbonize our oil and gas. We need to make sure that all the high carbon intensity of fossil fuels needs to be pushed out.

And we need to have low carbon intensity fossil fuels while we ramp up the renewables.

GIOKOS: So the efforts to decarbonize the industry, how much is being spent on that?

Because I think when we focus in on how much money is being spent on renewable energy sources of energy but we also need to focus on how much is

being spent on decarbonizing oil and gas. It will still be with us.

ALMHEIRI: We've spent around $150 billion in the last 20 years in the country and outside the country to ramp up the renewable energy space. And

we can see this takes time. It's not only the production, the distribution, it's the capacity building. So you need to have that pathway. But you need

to have that pathway, you need to have the political will.


ALMHEIRI: And for us, it is so important that not just we look at the net zero pathway to ensure we reach it; we need to support others as well to

reach it.

GIOKOS: The COP28 chair, minister Sultan Al Jaber, the head of one of the largest oil companies here in the UAE but also the cofounder of Masdar city

(ph), which is a renewable energy company. A lot of criticism, by the way, globally in terms of his appointment.

But he brings something interesting to the table. He understands both sides of the story. He's also been the one that is saying, look, we need to take

a pragmatic approach.

But then the question becomes, as we're investing a lot more in oil and gas, as we try to take this pragmatic approach, is it not going to derail

us from the efforts to try and cap the degrees to 1.5 degrees Celsius?

That is the big question.

ALMHEIRI: I actually believe that having him on board means we're actually able to move a sector that we really need to move. And if I look at -- he's

the one who set up (INAUDIBLE) city and the company Masdar. And if we look at their portfolio right now, I think they reached 20 gigawatts of what

they're operating and what they've developed in the country and outside the country.

He was put in ADNOC to future-proof ADNOC and make sure that it starts moving and to different energy sources, such as hydrogen, looking at a lot

of the new technologies as well.

So he has been the transformative figure in Masdar and has been put in ADNOC for that reason, to transform ADNOC to become the future ADNOC. And

now with that in mind, having him is really -- first of all, he's a businessman. He has a huge network.

If we are to make haste and move the needle when it comes to climate change, we believe he's the right man to do so.


GIOKOS: All right, just moments left trade on Wall Street. We will have the final numbers and the closing bell, right after this.




GIOKOS: Just moments left to trade on Wall Street. The Dow is set to close lower as well. We check in with those numbers, there we are, flat, 0.11

percent down. We started on the positive with better than expected inflation figures. And as you can see, the markets started going down after


Investors reacting to that inflation figure, which came in lower. Some stocks are getting a boost from those inflation figures as well. Tech

stocks are leading, Salesforce in the lead, Microsoft and Apple are not far behind, followed by IBM and Cisco.

Otherwise, as you can see, that is it for QUEST MEANS BUSINESS, I'm Eleni Giokos, the closing bell is ringing on Wall Street.