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Quest Means Business
Elon Musk Names Linda Yaccarino As New CEO; Voters Go To The Polls Sunday To Choose New Turkish President; South Africa Investigates U.S. Claims It Supplied Arms To Russia; U.K. Ekes Out Growth For First Quarter; Survey: 62 Percent Of Workers Are Satisfied With Their Jobs; Cost-Of-Living Crisis Continues To Weight On Brits. Aired 3-4p ET
Aired May 12, 2023 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:21]
ELENI GIOKOS, CNN INTERNATIONAL HOST: U.S. markets are lower, new US data shows consumers are getting more pessimistic. As you can see the Dow Jones
down 0.44 percent. That's a loss of 145 points. Those are the markets and these are the main events.
Elon Musk finds his CEO, a former NBC Universal ad exec signs on to run Twitter.
With inflation topping 40 percent, the economy dominates this weekend's election in Turkey.
And despite a shaky economy, US workers are more satisfied than they've ever been. A survey showing hybrid work is boosting happiness.
Live from Dubai, it is Friday, May 12th. I'm Eleni Giokos, in for Richard Quest, and this is QUEST MEANS BUSINESS.
A very good evening.
And tonight Elon Musk makes it official announcing NBCUniversal executive Linda Yaccarino will be the new CEO of Twitter. He said in a tweet, she
will focus on business operations while he focuses on technology.
It is the announcement yesterday without naming her. Yaccarino was in charge of global advertising and partnerships at NBC. She will face
significant challenges at Twitter where advertisers have been fleeing since Musk took over the company.
Vivian Schiller is the executive director of Aspen Digital. She used to serve as Twitter's global chair of news, and she joins me now.
Vivian, great to have you on thank you so very much.
Tell me, Yaccarino the right person for the job? I think many people are wondering whether she is going to be Musk's yes-man.
VIVIAN SCHILLER, EXECUTIVE DIRECTOR, ASPEN DIGITAL: I actually know Linda Yaccarino and worked with her at NBC. So, I know her quite well and I've
seen her in action.
She is nobody's yes-man. She is as tough and as competent as they come. And which, of course, to me begs the question, does Elon Musk know what he is
getting himself into? Because if he wanted someone who was going to follow orders, I don't think she's that person.
GIOKOS: Okay, so he says that she is going to run business operations, and that he is going to focus on technology and design. What is interesting is
that he's also saying this is going to, you know, help create and bring to fruition this platform X that he's been talking about.
But Twitter has a lot of problems first that they need to deal with before he can think about, you know, creating a mega platform and mega app.
SCHILLER: Yes, yes. I mean, best I can tell. Elon Musk is going to be both her boss and her subordinate, which is unusual. Her boss as chair, and of
course, the owner of Twitter, but as the person who is in charge of product and technology that has a role that usually reports up to the CEO. So,
that's very unusual.
But to your point about what she needs to clean up, absolutely. I mean, 90 percent of those messes were of Elon Musk's making that he introduced since
he took over control of Twitter. He has decimated key parts of the platform.
The content moderation policies are chaos. Advertisers have fled because they do not feel that it is a brand-safe environment and there are all
kinds of other questions about the security of the platform, and so on.
So she is going to have to come in and mop up a lot of the things that he fixed and crucially, I'm sure this is the main reason he hired her, to
regain the confidence of advertisers.
But in order to regain the confidence of advertiser, she has to prove that Twitter is a safe space. To prove that Twitter is a safe space, Elon Musk
is going to have to back off a lot of the very mercurial chaotic decisions that he makes on the platform. That is a wide open question of whether he's
capable of doing that.
GIOKOS: Yes. And that's a really good point. I think in the age of misinformation that we've been seeing whether Twitter is a safe space, we
are worried about the blue checkmark, the verification process.
I mean, to be honest, it's endless and it's a very long list that we've been seeing. You know, where does Linda start, would you say? What is the
most important thing that she has to do as priority?
SCHILLER: Well, I mean, her highest priority and obviously the reason he brought her in is she needs to regain the confidence of advertisers so they
can start -- so she can start bringing revenue into Twitter, so it's not hemorrhaging losses like it is today.
[15:05:05]
But that is only going to be possible and advertisers will only come back if Twitter is a clean, well-lit space, and right now, it is not. It is not
brand safe.
I'm just reading reports today about the site being riddled with animals snuff films. There is, you know, the blue checkmark, the paying blue
checkmark grade are amplified, up into the top of the timelines on Twitter and a lot of it is spewing hate or nonsense or misinformation.
So it is not a very good space and environment for advertisers to want to be next to with their products. So she's going to have to fix that in order
to restore and build the revenue. So that has got to be her first priority.
GIOKOS: Well, let me tell you, Twitter is ablaze with opinions. Yes, and listen --
SCHILLER: Oh, it is.
GIOKOS: Twitter is ablaze with opinions, in terms of -- so it has been interesting. I have to say, I've been watching very closely, it is
fascinating.
Look, Vivian Schiller, great to have you on. Thank you so very much for your time.
SCHILLER: Sure. Happy to join you.
GIOKOS: Turkish voters head to the polls on Sunday at a pivotal time for the country. President Recep Tayyib Erdogan is in a tight race with the
main opposition candidate, Kemal Kilicdaroglu.
Erdogan faced angry criticism in February over the government's response to a deadly earthquake. The election also has global implications, Turkey is a
NATO member and still talks with Russia.
It all comes amid a cost of living crisis. People in Turkey are struggling with some of the world's worst inflation.
If Mr. Kilicdaroglu wins, he is expected to reverse Erdogan's Maverick economic policies.
(BEGIN VIDEOTAPE)
GIOKOS (voice over): He is the self-proclaimed enemy of interest rates. Now, Turkish President Recep Tayyip Erdogan's unorthodox monetary policy
could be coming home to roost.
The President believes that high inflation is caused by higher interest rates, the exact opposite of mainstream economic thinking.
SELVA DEMIRALP, ECONOMICS PROFESSOR, KOC UNIVERSITY: Increased interest rate, increase the cost of borrowing, reduce demand and this way you reduce
inflationary pressures.
So in the unorthodox view adopted in Turkey, the idea was that because interest rates is an important cost of production, by lowering interest
rates, we can lower the cost of production.
GIOKOS (voice over): Since consolidating power in the 2017 referendum, Erdogan has pushed the central bank to aggressively cut rates. It has led
to skyrocketing inflation, officially measured around 43 percent in April, down from its peak of more than 85 percent last October.
The lira has lost over half of its value against the US dollar in the last two years and unemployment is at 10 percent.
HAKIM EKINCI, BARBER (through translator): I used to be an AKP supporter, but I'm not thinking of voting for them anymore. I want the dollar exchange
rate to decline. I want the price of petrol and inflation to drop. I want to go back to the life I had five or six years ago.
GIOKOS (voice over): The opposition candidate Kemal Kilicdaroglu has made fixing the economy a cornerstone of his campaign.
KEMAL KILICDAROGLU, TURKISH PRESIDENTIAL CANDIDATE (through translator): Today, if you are poorer than yesterday, the only reason is Erdogan.
GIOKOS (voice over): Erdogan is on the offensive to shore up support ahead of the elections. Just this week, he hiked the minimum wage by 45 percent
for 700,000 public sector workers.
He has also introduced cheaper housing loans and lowered retirement age requirements for some. And last month, he opened the Istanbul Financial
Center, a $3.4 billion development that Erdogan's party is pitching as a future financial hub for the region.
The government claims it will attract $250 billion in foreign investment by 2036. But the reality is, foreign money has been pouring out of the
country.
TIMOTHY ASH, STRATEGIST, BLUEBAY ASSET MANAGEMENT: You've seen a huge outflow of foreign money because basically they don't trust monetary
policy. They don't want to invest in a country where they don't trust the central bank. They don't think that the central bank is able to do the
right thing, kind of things in terms of interest rates to demand and manage the economy to defend the exchange rate.
GIOKOS (voice over): But whether the economic crisis will be enough to ask Turkey's strongman is yet to be seen.
(END VIDEOTAPE)
GIOKOS: Arda Batu is the Secretary-General for the Turkish Enterprise and Business Confederation. He joins me now from Istanbul.
Great to have you on the show. So look, your organization represents businesses and you're nonpartisan. You're a database think tank.
So you're getting a lot of messaging in terms of what businesses are thinking, feeling, and what they want right now. So what do they want,
regardless of the outcome of Sunday's election?
ARDA BATU, SECRETARY-GENERAL FOR THE TURKISH ENTERPRISE AND BUSINESS CONFEDERATION: I think it's quite straightforward what the business wants
not only in Turkey, but I think what I am allowed to say is global expectation of businesses whether it be small, medium-size or big
corporations.
[15:10:09]
Businesses want suitable environment, an accommodating environment for business, which means peace, stability, easily forecasted economy.
When you go into more structural issues, we want checks and balances; again, sound independent regulatory bodies. A meritocratic, let's say, way
of doing business, we want people in the right places.
I was just listening actually, to the earlier interview that you were conducting on the Twitter leadership. It really doesn't matter if we're
talking about private sector or public sector. It's the meritocratic approach and it is the right leadership who can really push forward agendas
and push forwards reforms that will help economies prosper.
Again, adding to that, a very sound economic education policy, I think, again, not only pertaining to the Turkish situation, but again, a global
phenomenon.
We're talking about the future of work, again, alluding to your earlier interview. We're talking about the brave new world with social media, a new
level of communication with blue ticks on and off, and we need the right people with forward looking --
GIOKOS: That's a long list, Arda.
BATU: It is. It is not an easy --
GIOKOS: And I mean, look, that's a long list. And I mean, look, a lot of that list -- no, and a lot of what you're saying is not currently seen in
Turkey, right? You've got interventionist policies, you have very questionable monetary policy that has created the inflationary environment
right now in Erdogan's -- under Erdogan's leadership.
How would you say the structural reform needs to happen? Are you seeing the messaging that is positioned in the right way ahead of these elections?
BATU: I mean, I think we need to see Turkey and understand Turkey as an emerging market. I mean, obviously, putting aside the policies in the
central bank and the prudential policies that have been pushing forward, we do have to be fair, and understanding that Turkey has been an emerging
market that has, you know, moved forward with the COVID crisis.
We have been struggling with the Syrian crisis with more than three million refugees in the country. And now with the earthquake, that CNN
International had a very wide coverage off, and I'm sure you know about the data.
But as an emerging market, we have the typical problem of high need of foreign finance, which has not been available, especially now with to our
north with the Russia-Ukrainian crisis, a high rate of domestic savings gap. Again, it's a big problem for the Turkish economy.
So international and domestic factors have really come together to create this current situation, as you said, with inflation as well as currency
shock.
GIOKOS: Arta, I think, you know, Turkey has experienced an unspeakable trauma. The world wept with you after the earthquake, during the
earthquake. It is going to be costly. There needs to be rebuilding. Private sector needs to be involved. What does the data tell us?
BATU: I have to say, we have been very involved with the natural disasters. We have been working very closely with the United Nations Development
Programme and OCHA since 2018. We have been trying to be active as a private sector representative institution, and pushing the agenda of
preparedness for the private sector, as well as collaboration between private sector and public sector in the face of natural disasters, which is
unfortunately a sad reality for Turkey. We are a natural disaster prone country.
Now, just some maybe striking data that CNN International has also covered widely, as I said earlier, the earthquake has hit 11 cities, Eleni, 11
cities.
Just drawing on some of the economic data, 20 percent of the industrial zone is concentrated in the earthquake zone, 20 percent. I mean, it's quite
catastrophic for the earthquake. We're talking about more than three million people displaced.
We're talking about one million residences that need to be built for simply the shelter issue. And as I think your international audience knows very
well, especially the ones that are in natural disaster areas, unless you have the shelters in place, really, it's futile to talk about economic
recovery and the rest.
And to my knowledge, this data needs to be checked, but I think the capacity of Turkey in building residences is about 500,000 annually. So one
million need, 500,000 annual capacity, you know, you do the math.
GIOKOS: Yes, Arta Batu, thank you so much. I wish all the best. Great to have you on the show.
BATU: Thank you for having me, Eleni. Take care.
[15:15:10]
GIOKOS: The South African rand is under pressure. It hit an all-time low against the dollar and that concerns over the country's energy grid and US
accusations that Pretoria supplied weapons to Russia. Details are coming up next.
(COMMERCIAL BREAK)
GIOKOS: South Africa has launched an investigation into US allegations the country covertly supplied weapons to Russia. The US ambassador to South
Africa claims a Russian vessel was loaded with weapons at Simon's Town in December.
Opposition leader, John Steenhuisen told CNN earlier, he is now pushing for the government for answers.
(BEGIN VIDEO CLIP)
JOHN STEENHUISEN, LEADER, DEMOCRATIC ALLIANCE PARTY: It's very clear now from the ambassador's comments that there was materials of war loaded onto
that ship at a government navy shipyard and that has made its way into other parts of Africa, but also certainly, it seems to the Ukraine.
And I think that it is ghastly to contemplate that South Africa has been complicit in the murder and slaughter and the war that is going on in
Ukraine by the Russian forces.
(END VIDEO CLIP)
GIOKOS: CNN senior international correspondent, David McKenzie has more from Johannesburg.
(BEGIN VIDEOTAPE)
DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, the fallout of the explosive allegations by the US ambassador to South Africa continue. He is
being summoned by the South African government.
He accuses South Africa are providing arms and ammunition to Russia. It all stems from this vessel, a sanctioned cargo ship that docked in port at a
naval station in December, near Cape Town.
Now the accusation is from the Americans that they clandestinely provided arms and ammunition, loaded in the dead of night onto that cargo vessel and
then it ended up in Russia.
Now, there is no evidence being provided yet of this and South Africans haven't denied specifically the allegations, but it is very unusual for
these direct kind of accusations from a US ambassador to their host country.
The South African government also says there is no record of illegal transfer of arms and ammunitions to Russia and they are going to set up an
independent inquiry.
[15:20:00]
Now, coincidentally the South African president according to the Kremlin spoke with Vladimir Putin on Friday. In that discussion, they mostly talked
about, it seems the upcoming Summits, the Africa Summit in Russia and the BRICS Summit here in South Africa later this year.
It's unclear whether Putin will show up in South Africa since he is under indictment at the International Criminal Court. South Africa has a trade
relationship and a history with Russia, but it is greatly dwarfed by the trade relationship with the US notwithstanding. A South African official
said that the relationship between South Africa and the US remains cordial, strong, and mutually beneficial.
David McKenzie, CNN, Johannesburg.
(END VIDEOTAPE)
GIOKOS: All right, well, South Africa's diplomatic turmoil has contributed to a brutal week for the country's currency. The local currency, the rand,
it is now at around get this -- 19.36 to the US dollar. It had plunged after the news of the alleged arms shipment.
The rand has also lost value this week over concerns that the country's crippling power cuts are going to get worse.
Today, JPMorgan cut its growth forecast for South Africa. It now expects the economy to shrink by two percent because of those energy concerns.
That's compared to its previous forecast of 0.3 percent growth.
Khaya Sithole is an independent analyst and he joins me now from Johannesburg.
Khaya, great to have you on. It is so painful to see what the rand is doing as a South African, I have to say it is unbelievable to see what it has
done against the US dollar. It's on the back of this news, right, but it's also a confluence of issues, the power cuts and the other domestic problems
that South Africa is facing.
But what we've seen now with the US ambassador saying that South Africa supplied arms to Russia, that seems to have exacerbated the situation. Take
us through what the rand is doing and what it is responding to.
KHAYA SITHOLE, INDEPENDENT ANALYST: So good evening.
And I think obviously, as you rightly said, it is the sum of different factors that have equally contributed to the decimation of the rand.
What we do know is that our currency has historically been weakened, our currency is very active in relation to exogenous global events, in
particular.
What we have seen this week is that there's been an amplified reaction in relation to the fact that from the moment, I think the currency market
became aware that there will be a statement coming from the US ambassador, the very first instinctive reaction was a suspicion that perhaps this would
lead to the type of sanctions that would then make it very difficult for South African businesses and indeed, the South African currency to be as
actively traded in the global markets as it is.
So you saw that huge decline that was actually happening long before we actually saw the first press conference from the US ambassador and that
obviously reflects the great anxiety that everyone has around the question of, well, what will the consequences of all these developments be?
GIOKOS: Absolutely. I mean, I've been looking down a lot, I'm sure, you at home, might have noticed. I've just seen a tweet by Clayson Monyela. He is
the head of public diplomacy, and he said that the US ambassador to South Africa met with ministers earlier today.
And look, they are saying that they still -- that this isn't factual that they -- South Africa did not supply to Russia. But of course, we know that
there's a commission of inquiry that is going to be put in place to try and figure out and investigate what actually transpired.
But this is a strange relationship, it seems with the West, specifically because South Africa seems to be leaning towards not wanting to condemn
Russia for the war in Ukraine. Putin might be coming to South Africa for the Summits later this year. There's an ICC, you know, arrest warrant out
for him. The question is, is South Africa going to arrest Putin if he does arrive?
There's just so much tension, I think that is putting strain on these relationships.
SITHOLE: Yes, and the origin of the tension is that South Africa, like any other country took a particular stance at the outbreak of the Ukraine
invasion last year, and South Africa said that they were not going to sort of take a position in either way. They were going to promote the type of
diplomacy that was going to end up with a conflict being de-escalated.
So that non-alignment position is a position that any country was within its means to choose.
What seems to have been the problem that has developed since then, is that in spite of the pronounced position of non-alignment, South Africa has been
seen to be actively embracing Russia in relation to this particular conflict.
So we do know that even before we heard about the whole Simon's Town story, there was some naval expeditions that were done between the country and
Russia earlier on this year.
We do know that the Russian foreign minister, Sergey Lavrov has actually been given an audience by Pretoria. So obviously, for a lot of observers
who thought South Africa was taking a neutral position, that created a sense of curiosity about how exactly neutral that position was when you
were doing this type of activities that will lead many people to thinking that they are actively embracing Russia.
[15:25:08]
So that has been the origins of the problem. What we are now also seeing is that when the ICC then issued that indictment against Putin, we already had
planned the summit at the BRICS Summit later on, and then the question was, well, how will South Africa react to this?
And so far, the reaction has been so ambivalent, very few people actually know what South Africa's position is in relation to this current crisis.
GIOKOS: Khaya, there have been more blackouts in 2023 or power cuts in 2023 than we saw in 2022. And we're sitting only in mid-May. How bad is the
electricity situation going to get?
SITHOLE: Well, unfortunately, it is not going to get better until we get some direction from the government on what the immediate short-term
solutions are.
So what we do know is that Eskom clearly has been made very clear that they do not have the capacity or the resources to fix the problem on their own.
So what we've been hoping for is that other parts of the state or other arms of the state are going to contribute towards a holistic solution.
So, so far, the lack of coordination simply meant that no one in the country can accurately predict or estimate that the situation is going to
get better anytime soon. So what we've now ended up with is the issue where some people with means are simply then opting out or participating in the
grid.
So you're seeing that given National Treasury has given some tax incentives to promote not moving away from the grid. So unfortunately, for a lot of
citizens who do not have the means -- the financial means to go off grid, they're going to remain dependent on Eskom and Eskom, unfortunately, at
this point, quite simply still doesn't have a holistic range of solutions that is going to enable us to believe that in the short term, or in the
medium term, we're going to have a de-escalation of the loadshedding crisis.
GIOKOS: Yes. That's one thing I don't miss, it is the power cuts. Khaya Sithole, great to see you. Great to have you on the show, sir. Much
appreciate it.
All right, so let's move on, and in Ukraine, Russian troops are losing ground around Bakhmut as Russian officials say the troops pulled back to
take up defensive positions. The head of the Wagner Group accused the Defense Ministry of lying. He says Russian soldiers didn't pulled back,
they fled.
A Ukrainian commander told CNN a different story altogether. He says Wagner mercenaries were the first to abandon their positions. Ukraine says its
forces have advanced two kilometers over the past week.
Our Nick Paton Walsh in Zaporizhzhia for us.
Nick, a lot of different perspectives depending on you know, where you're standing. Give me a sense of what is going on.
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Now, it's pretty clear, Eleni that there has been a significant change in territorial
control around the outskirts of Bakhmut, not major amounts of ground, but something that does change the narrative.
Certainly, there seems to be consistency between what Yevgeny Prigozhin, the head of Wagner Group is saying that conventional Russian military
abandoned positions on the outskirts of town that appears to be echoed by a Russian Ministry of Defense statement, saying that they've taken up "more
advantageous positions" around the city, essentially ones that are further back from where they used to be and that is also echoed by Ukrainian Armed
Forces.
Now, Prigozhin goes on to say that this seems to leave the Ukrainians in charge of some of the strategic heights to the northwest of the city and he
thinks his forces are really grasping the city center themselves and trying to move forward block by block in there.
This is all part of the public week long extraordinary for Putin's Russia rant he has been having against Russia's top brass and their conduct of the
war and their supply of weapons to his men. But it now appears to be having a territorial effect with this being the second actual change in territory
over the past 48 hours.
It doesn't really change the story of who is in control of Bakhmut at the moment, but it's an enormous thorn in the side of Russia's military pride,
particularly given how you don't normally hear this sort of thing at all in Putin's Russia, and that we are now heading towards Ukraine's
counteroffensive.
US officials suggesting that we may be looking at the shaping operations before that counteroffensive beginning that will be targeting key
infrastructure. That may be what we saw just in the last hours in Luhansk. That's a key city in occupied areas in eastern Ukraine, massive explosions,
blast ripping through some key buildings there and it is not quite clear what caused them although occupation, Russian officials there are pointing
towards the recent donation by Britain of a Storm Shadow missile provided no evidence to back up their claims.
But we may see more of this going forwards. We have seen some of it, too in the past two or three weeks increasingly pinpoint strikes against fuel
depots, parts of the command infrastructure of Russian occupying forces, railway tracks, the things they need to keep their military running have
been picked at persistently over the past weeks that appears to be picking up in tempo over the last 48 hours.
And yes, certainly I think we are looking now at a counteroffensive which Ukraine's president, Volodymyr Zelenskyy has said has not started yet, but
does appear to be having its groundwork laid quite thoroughly -- Eleni.
GIOKOS: Nick Paton Walsh, thank you very much. Good to see you.
Well, if you're happy and you know it, you could clap your hands or you just might be a worker in the US. A new survey says job satisfaction there
is the highest on record. We'll explain why after this.
(COMMERCIAL BREAK)
[15:30:29]
GIOKOS: Well, the U.K. economy expanded in the first quarter, but just barely. It grew nought point one percent showing that the economy is more
resilient than originally forecast. But the U.K. isn't out of the woods just yet. The economy has slowed drastically over the last two years as
inflation ways. And Brits deal with a major cost of living crisis. Spending isn't likely to ramp up anytime soon.
Sanjay Raja is the chief U.K. economist at Deutsche Bank. And he joins me now from London. In line with expectations, I, you know, nought point one
percent quarter on quarter growth, but this is still dismal in the greater scheme of things, isn't it?
SANJAY RAJA, CHIEF U.K. ECONOMIST, DEUTSCHE BANK: Thanks for having me on, Eleni. Absolutely. It's a really a tale of two halves. I think the good
news is that for a second consecutive quarter U.K. GDP expanded. Now, let me take you back to three months ago, expectations were for a protracted
recession. The survey data was talking up the risks of a long one-to-two- year recession.
The Bank of England was expecting a long recession. We were expecting a recession as well. But against all odds, the U.K. economy has defied
expectations. We managed to just about eke out two consecutive quarters of growth. But as you say, we're not out of the woods yet. We are seeing
tightening and monetary policy work its way through the economy, industrial action dragging on the U.K. economy. And we saw that just a little bit in
the March GDP numbers.
[15:35:02]
So, yes. Q1, point-one percent, Q on Q growth but March GDP falling by 30 basis points. Point-three percent month on month. And that I think is just
a reflection of the state of the U.K. economy.
GIOKOS: Yes. And it's a cost-of-living crisis, right? Which inflation is just chipping away at people's ability to be able to spend 12 consecutive
interest rate hikes. And we know that the MPC is sort of divided and those that think that there should be a pause to try and give consumers some
relief and others that think this should continue. Where do you stand? What do you think that the right thing to do here is?
RAJA: Well, certainly the MPC is divided, as you say, below -- the MPC has opened the door for another hike. We came into 2023 saying that landing
zone for the bank rate for the Bank of England is somewhere between 425 and 475. That's where we think they'll end up landing. And we've hit 450
yesterday with a quarter point hike from the Bank of England. We think there's one more left in the tank. We think we see terminal rates at 475.
That is our base case expectation. We're expecting to see labor markets continue to outperform expectations and inflation stay a little bit
stickier. Bear in mind, U.K. inflation is still at 10 percent. A little bit above 10 percent. We have one of the most elevated inflation prints across
the G7.
GIOKOS: What is the prognosis in terms of, you know, how quickly these interest rate hikes are going to put a dent in inflation? Keeping in mind
all the other externalities, all the other pressures that we're seeing coming through in the global market which is obviously feeding through into
the inflationary scenario?
RAJA: Well, the famous line is that monetary policy works with a lag of 18 to 24 months. There's good reason to think that maybe that may be slightly
on the optimistic side. But we are seeing some of that, some of that feed through into the economy. If you look at the March GDP numbers go right
back to that consumer facing services down 2.8 percent on the month. So, we are seeing some of the effects of that tightening and monetary policy work
its way slowly but surely.
But the peak effect won't really come, won't really hit us until the middle of next year. And maybe even slightly later than that. Just given the lags
and monetary policy transmission.
GIOKOS: Yes. Really hard to predict. Try to either too proactive or reactive on monetary policy. Hopefully, it'll all work out. Good to see
you, Sanjay Raja. Great to have you on the show. Thank you.
A bright spot in all this economic uncertainty. The labor market has remained surprisingly strong and that's having a big effect on how people
feel about their jobs. That's in the United States. A new jobs survey shows that that satisfaction is at a record high. Vanessa Yurkevich, CNN business
and politics correspondent is here with what's driving this euphoria. But it's a great to have you on. What are people happy about? Do tell.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, 62 percent of Americans say they are satisfied with their jobs. That's up two
percent since last year. And that is the highest on record since the Conference Board started doing this survey in 1987. And there are two main
reasons. One is the tight labor market here in the United States. That is offering better wages, better benefits to employees.
And also, people really are loving their flexible work schedule here in the U.S. So, who was the happiest amongst all of these Americans that were
surveyed? Well, folks who have hybrid work schedules. They were actually more satisfied with their jobs versus people who were fully remote. Also,
job switchers. People who have switched jobs in the last year. And men reported being more satisfied with their jobs than women.
In this survey, both men and women were given 26 components to rate about the satisfaction of their job. And in all 26 categories, men rated higher
satisfaction than women. Women were dissatisfied with things like pay, bonuses.
(CROSSTALK)
GIOKOS: I just saw that on the graphic. I saw that on the graphic. And I was like, why men always happier? What is good?
YURKEVICH: I don't know why men are always happier. But in this instance, men are happier because they are just rating higher on these specific job
elements. So, you're talking about the bonuses. Men happier with their bonuses than women. Men happier with the benefits their company provides
than women. Same goes for promotion. Same goes for wages. And, you know, Eleni, another part of this may be because during the pandemic, women were
hit the hardest.
And we also know that there is a gender pay gap. And some of that dissatisfaction may be showing up in this report.
[15:40:01]
But if you step back and look at this, holistically, 62 percent of Americans being happy with their jobs. That's pretty good that shows the
strength of the worker here in the U.S. That shows that they are capitalizing on this tight job market. And clearly, Eleni, they're
satisfied with it.
GIOKOS: Yes. We got to change that statistic though.
YURKEVICH: Yes, we do.
GIOKOS: Men and women have to be equally happy. Vanessa, great to have you. Yes. Great to have you on. Thank you so much.
And that's it for QUEST MEANS BUSINESS. I will be back at the top of the hour as we make a dash for the closing bell. We want to stay tuned for
that. Coming up next though. Connecting Africa.
(COMMERCIAL BREAK)
[15:58:14]
GIOKOS: Hello. I'm Eleni Giokos. It's the dash to the closing bell. And we're just two minutes away. Joe Biden and congressional leaders called off
their debt ceiling meeting today. So, it's not necessarily a bad sign, but it is something investors are watching very closely. So, the Dow slipped
this morning and it's flat after late session come back. As you can see, we're down around 10 points.
The other U.S. indices are also lower as well. The NASDAQ is taking the biggest hit today as you can see down nought point four percent. S&P also
in the red. So, it's a red day across the board as we head into the weekend.
Now, Turkey's presidential election is on Sunday. The country's economy is in a fragile position. Business Leader Arda Batu says the problems go
beyond sky high inflation.
(BEGIN VIDEO CLIP)
ARDA BATU, SECRETARY GENERAL, TURKISH ENTERPRISE AND BUSINESS CONFEDERATION: We have been struggling with the Syrian crisis with more
than three million refugees in the country. And now with the earthquake here that CNN International had a very, you know, wide coverage off and I'm
sure, you know about the data. But as an emerging market, we have the typical problem of high need of foreign finance which has not been
available, especially now with -- to our north with the Russia-Ukrainian crisis.
A high rate of domestic savings gap. Again, it's a big problem for the Turkish economy.
(END VIDEO CLIP)
GIOKOS: Well, let's take a look at what is moving. The Dow today. The win - - the losers and winners, of course are not equal. As you can see there are far more losers right now. Nike is at the bottom, down around 2-1/2
percent. Banks are lower. We've got JPMorgan well in the red. Few winners on the board today. As you can see IBM, Home Depot reports next week.
That's going to be, of course, a big focus points it's stuck is eking out.
[16:00:06]
Some very small gains to end the week. IBM is right at the top. As you can see up around point-eight percent.
Well, that's your dash to the closing bell. I'm Eleni Giokos. And it's ringing right now on Wall Street. "THE LEAD" with Jake Tapper starts now. I
wish you have fantastic weekend.
END
