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Quest Means Business

Trump Threatens Another Round of Strikes on Iran Tonight; Dow, S&P Slide on Renewed Middle East Tensions; IMF Projects Slower Growth, Higher Inflation in 2026; Interview with Rep. Adam Smith (D-WA)

Aired July 08, 2026 - 16:00   ET

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

[16:00:17]

PAULA NEWTON, CNN INTERNATIONAL HOST: The Dow down nearly 600 points, but off its lows, and you know what? Perspective is a great thing. Remember, it

had closed at a record high. S&P and NASDAQ as well faring much better than how they started the day. Those are the markets and these are the main

events.

President Trump says more U.S. strikes on Iran are likely imminent after saying the Memorandum of Understanding is over.

The IMF says the conflict in the Middle East will slow global economic growth even further. We will speak to the IMF Deputy Director.

And Europe's new border entry system. I know you guys have been caught up in it. It has been a nightmare for travelers. The CEO of Rome Airports will

be here with us.

Live from New York. It is Wednesday, July 8th. I am Paula Newton in for Richard Quest and this is QUEST MEANS BUSINESS.

Tonight, U.S. President Donald Trump says the interim agreement to end the war with Iran itself is over. He is threatening to launch another attack

against Iran, as soon as tonight, while a U.S. official tells CNN the administration is considering its next moves.

All of this after a fresh exchange of fire between the two countries. The U.S. struck Iranian ports after Iran attacked commercial ships in the

Strait of Hormuz. Iran then hit Bahrain and Kuwait, saying it targeted 85 U.S. Military sites there.

Speaking at the NATO Summit in Ankara, President Trump threatened to target civilian infrastructure. He also threatened to move on Kharg Island, a

major hub for Iranian oil exports. Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: We hit them very hard last night -- very, very hard. Probably hit them hard again

tonight. I gave them a little warning, we are going to hit them hard tonight. But we will see how it all works out.

We may take over Kharg Island. It is not a thing they can do about it.

But I said, don't hit the pipes. Just hit everything else and they hit it. They may hit it again tonight.

(END VIDEO CLIP)

NEWTON: Alayna Treene is at The White House for us.

I mean, the President being blunt and saying, look, we will still be at this perhaps in a matter of hours. We will start with Iran.

You know, he seemed to say just a few weeks ago that he thought they had a good relationship. The negotiations were going well, that they thought they

had come to a Memorandum of Understanding.

Today, at the NATO meeting, completely different.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Absolutely! There has been a lot of mixed messages, even just from what he has been saying today, but you're

absolutely right.

If you look at where things were just a couple of weeks ago, the last time President Donald Trump was on an international trip, that one, of course,

being in June around the G7 Summit in Geneva, the President coming out and arguing that a lot of the leaders in Iran were rational people, were smart

people, and this was actually a question. I thought it was one of the best questions asked during that press conference where Trump concluded his time

at the NATO Summit.

A "New York Times" reporter asked the President, you know, you just a couple of weeks ago said that these were great people to work with, that

you got along well with them. Today, you're calling them evil. You're calling them scum. What changed?

The President argued, well, I got to know them, and I think that kind of sums up in his mind, his frustration with them. Part of the reason we are

seeing the President really lash out. You could visibly see the anger he had this morning when talking about Iran, when he was arguing that the

ceasefire is over, is that he is not happy where negotiations stand.

I would remind you and our viewers, Paula, that when the President signed that Memorandum of Understanding back in June, the thorniest issues for a

deal between the United States and Iran were still left up to be settled. That includes a lot of the specifics around Iran's nuclear program, the

same things Trump was raging about today.

I think what's still unclear, though, again, is that you are hearing these mixed messages again within the same day, just in a couple hours of each

other from the President himself. This morning, he argued, yes, we might hit Iran again tonight. At another moment, though, a little bit later he

said, well, we are not so sure.

And he also argued that there wouldn't be another all-out war, that he doesn't want this to be a long thing, that he thinks this could be wrapped

up quickly.

You also heard him talking about at times as well, that, you know, he thinks the leaders of Iran are loco. He said that they're crazy. That's the

word he used -- "loco." But he also then argued that the negotiators, people like Steve Witkoff, Jared Kushner, the Vice President, he said they

are doing a great job and it is up to them how they want to handle this and if they want to keep negotiating.

So all of that, I think, gives you just this very kind of messy state of play where not a lot of people know what the path forward is here and I

think for Trump's point of view, it is unclear exactly what he wants at this point, too.

From the threats that he has been making toward Iran, a lot of those are the same threats we've heard him use in the lead up to that initial

ceasefire a couple months ago, when Trump was arguing he was going to go in and attack Iran's critical infrastructure, their energy sites, even argued

desalinization plants.

[16:05:18]

Something he talked about this morning as well when talking about the potential attacks, you could see the U.S. Military launching. And so a lot

of this is also, I think, some pressure that he is trying to put on Iran to force them to really negotiate in a way that is more to President Donald

Trump's liking.

NEWTON: Yes, you make good points there. And I would say, given this is a business show, the President has had a lot of luck in using that leverage

on either bringing down, I would say, the heat in those energy markets and perhaps he feels like he has a little bit of room. He talked about that as

well today.

Alayna Treene for us from The White House. Appreciate it.

Now, U.S. markets were mostly lower on the renewed tensions. The Dow closed more than 700 -- pardon me, 540 points lower. You see it there. The S&P

also finished in the red. Brent crude, this is the crucial one. The global benchmark shot up $78.00 a barrel. West Texas Intermediate is around

$74.00.

Gasoline futures in the U.S. spiked six percent earlier, the highest single day increase in three months. Anna Stewart joins us now from London.

And, Anna, you and I will pour over this lovely chart that we are about to show, because this is Brent over the last -- what is year-to-date at this

point -- so a little bit more than six months and you will see that we had gone to a point where we were almost where we were before the war started,

and yet here we are again.

These markets remain extremely nervous about any potential ceasefire.

ANNA STEWART, CNN REPORTER: And unsurprisingly, I think given the day that we've had or the last 24 hours, but you're right. Last week, we were

talking about how the war premium has kind of disappeared off the oil price, not today.

But, you know, we had multiple press conferences from President Trump where things were said, like he will very probably hit Iran again tonight. He

threatened to bring back a naval blockade. He said he believed the MOA, the deal with Iran to be over. But then he said he doesn't think the war will

restart.

So mixed messages, not enough, really, to calm investors. He also said he isn't concerned about oil prices. In the many, many Q&A he had today, he

was asked relentlessly about oil prices and he said he is not concerned. They are not where they were. They're not at their highs and he is right.

You know, we saw oil prices at, what, $120.00 a barrel in the middle of May. That was the high. So we are far off of that.

And looking forwards, if you speak to oil analysts, they believe that in terms of supply and demand, we could see oil prices going a lot lower by

the end of the year and that's because there is a lot of oil.

I mean, speaking to oil from Saxo Bank, he called it a small mountain of barrels piling up inside the Gulf. There may be actually too much supply

for demand by the end of the year, but only when that oil can actually get out.

NEWTON: And that is key on the Strait of Hormuz in many cases. You and I also pour over the marine traffic, and it has been picking up there despite

the recent kinetic action, again, between the United States and Iran.

STEWART: I love a bit of a vessel finder watching. I like marine traffic, too. And let's have a look. Monday, there were 36 crossings through the

Strait. That's actually quite a lot given past weeks. Yesterday, 41. Then today, we've had a drop of around 50 percent. There were 20 crossings that

included six tankers.

Now compare that to pre-war where you saw 110 crossings a day. You know, we are not there yet, but this is a serious uptick. Also, Iran has been able

to ship a fair amount of oil out. I was just reading our latest right on CNN, it says that 60 million barrels of oil were able to get out from Iran

through the Strait since June 18th. That's according to Lipow Oil Associates.

Now, the question is, you can get the oil out or some of it is already out, but where are you going to sell it? Because sanctions for Iran are back,

probably China, which has always been practically their only customer through sanctions in the past. The issue is, of course, China right now

doesn't actually have as much of an oil demand as it has in the past. So it may struggle to find buyers.

NEWTON: Key though, marine traffic called the traffic resilient. We will see if that lasts and it might have been what emboldened the President here

to really get tough on his Memorandum of Understanding which he says is over.

Anna Stewart for us. Thanks so much. Appreciate it.

The war has already done a number on the IMF's world economic outlook. The Fund released its latest projections today. It now projects the global

economy to grow only three percent this year. That is slightly lower than its April forecast.

Global inflation, meanwhile, is expected to hit 4.7 percent in 2026, it is 0.3 points higher than its April projection. The IMF says the energy crisis

is weighing down the global economy.

Petya Koeva Brooks is deputy director of the IMF's Research Department, and she joins us now.

I really want to thank you for being with us, especially as we continue to parse the news from the region pretty much by the hour, even before the

latest price shocks in the energy markets and I am really just talking 48 hours here.

You warned in this report that the possibility of renewed Middle East conflict looms and could, in your words, extend commodity price volatility.

[16:10:27]

You also say, though, conversely, that the global economy weathered this energy shock better than feared. Why?

PETYA KOEVA BROOKS, DEPUTY DIRECTOR, INTERNATIONAL MONETARY FUND RESEARCH DEPARTMENT: That's right. We see the global economy as being pulled in

different directions by different forces and the war pulling it down and then the technology boom going in the opposite direction.

And we are projecting a V-shaped recovery as the war is weighing on, on growth this year. Now, that being said, of course, developments overnight

also point to the substantial uncertainty and risks surrounding that.

So our message is that in some ways, we have seen a lot of resilience so far, as the oil shock had turned out up to now, not to be as large as it

could have been given the use of strategic reserves, the lower oil demand and the production elsewhere.

But going forward, this is indeed a significant risk that now with reserves at lower level, if the conflict were to escalate, we could see again,

higher oil prices, inflation expectations being affected, and financial conditions as well.

NEWTON: And I want to point out, it could be escalating even at this hour. We heard President Trump say that even tonight they may hit Iran again.

Now, you still see, though, this kind of economic adversity that there is tension between regions, as we've heard so many years, the haves and the

have-nots on domestic energy production. Many countries, especially in Asia, are feeling the strain and feel quite captive to these geopolitical

shocks.

You don't really see that ending until at least the back end of 2027.

BROOKS: Well, we see that divergent outlook, the uneven outlook going on for a while. And I think it is -- one part of it is again, the exposure to

the energy shock. There are a lot of importers and many of them actually are low-income countries. Some of the countries are in Asia, but also

elsewhere that those countries that had not been benefiting from the technology boom, investment boom, hey are the ones that are being very

affected.

But on the other hand, we do have countries, including in Asia, like Korea, like Thailand and such, the ones that have been plugged in in the A.I.

technology boom, supply chain that have actually have upgrades relative to what we expected back in April. So it is really a very diverse picture

across the world.

NEWTON: You know, you have said that policy leaders need to be nimble in the long term, they need to develop a certain robustness. I am wondering,

given the fact that inflation may yet rise substantially, will they have the room to do that? Because you point out again and again in the report

that price stability is really what everyone should be aiming for here.

BROOKS: Central Banks do have the tools to react to developments in either direction. Now we have, as we point out, that headline inflation has gone

up more than what we expected. But at the same time, the good news so far has been that core inflation has been fairly stable and there have been

very limited second round effects.

Now, of course, it is the early days. And if we were to see additional increases in oil prices, then it would be particularly important to watch

out and see what happens with inflation expectations.

And again, Central Banks would need to be particularly nimble in their response to the incoming data, including what happens with inflation

expectations.

NEWTON: I am wondering, Miss Brooks, does the sovereign debt level around the world bother you? I mean, no developed country seems to be paying any

attention at all to their debt or their deficits. Do you believe that a fiscal reckoning is coming? And I don't mean in developing countries,

because the IMF has had to deal with that for decades.

BROOKS: Well, debt levels have increased over the years, and this has been a message that we have pretty much in every report, how important it is to

actually go back --

NEWTON: It is what I wonder.

BROOKS: Well, one of the things that we point out here is that there have been a number of measures that governments across the world have rolled out

in order to provide support in the face of the energy shock.

[16:15:10 ]

Thankfully, those have not been as large as in the past, but we still think it is very important as the shock fades for those measures to be unwound.

And, also just to go back to replenishing those fiscal buffers, because there will be more shocks going forward. And I think, again, the ability of

governments to respond would be severely limited unless there is fiscal room.

Again, from your lips to the halls of power, as again, in developed countries, this is going on. Now, we will see if anyone is listening.

Miss Brooks, again, appreciate the deep research from the IMF. Thanks so much.

BROOKS: Thank you very much.

NEWTON: Coming up, there is more drama at the FIFA World Cup as Egypt accuses referees of unfair treatment after their nail-biting loss.

Heartbreaking, really to Argentina. We will have the details after the break.

(COMMERCIAL BREAK)

NEWTON: And we do have some breaking news into CNN.

U.S. Central Command now confirms that the U.S. has struck Iran. You'll remember that President Trump did, in fact, persuade this in his future,

saying that we may hit Iran even tonight. This, according to U.S. Central Command, they are saying that it is at the direction of the commander-in-

chief. U.S. Central Command forces have started conducting additional strikes against Iran to further degrade their ability to threaten freedom

of navigation in the Strait of Hormuz.

The United States is holding Iran accountable for recent unjustified aggression against commercial shipping and civilian crews, freely

navigating a vital international waterway.

Again, the President had indicated as much before he left for the NATO Summit, and we will continue to bring you more information as we receive it

on what seems to be ongoing U.S. strikes on Iran.

Now, the teams may be taking a day off, but the drama at the FIFA World Cup isn't taking a break. Egypt is complaining of unfair treatment by the

referees after Wednesday's loss to Argentina, particularly their use of video review.

Egypt gave up three goals in the game's final 13 minutes after leading two- nil after the game, Egypt's coach described some of the refereeing decisions as an injustice and Egypt's soccer federation has reportedly

asked FIFA to launch an investigation.

We are thankful to have CNN sports analyst, Christine Brennan here.

[16:20:10]

You have seen it all and here we are, you're going to see more.

The Egyptian Football Association is criticizing the Video Assistant Referee, the VAR system. They're saying it wasn't used properly, but they -

- you know, their accusations were somewhat more grave than that. They questioned the fairness of the decisions or you know, Christine, if we even

want to quote the New York Mayor Mamdani, he says that Egypt were robbed.

This -- FIFA put in the video review, I thought, correct me if I am wrong so that this wouldn't happen, so that we wouldn't have these controversies.

CHRISTINE BRENNAN, CNN SPORTS ANALYST: Well, you are not wrong, Paula, about that. That's the idea to use the go-to-the-videotape, as they used to

say in sports casts.

And for example, the National Football League did this years ago, decades ago and the point was made by the legendary, Don Shula, the great coach of

the Miami Dolphins, who said if someone sitting at home can know more about our game than we do, meaning at an NFL game at the moment, as he was the

coach of the Miami Dolphins, if a fan knows more because they see the replays, he said, then we should be using the replays.

And that makes sense, right? But the question here now is the minutiae. And sometimes minutiae is very important. I am not minimizing that at all. But

in the case of the Egypt goal, the transgression in what was then called the goal was called back because of something that happened 100 yards away

from the terrific Egypt goal as they went down the field in the 58th minute at that point, to take it to two-nothing lead.

So when you've got a questionable tackle, but it's a hundred yards away from the goal and several I mean, a good 10 or 15 seconds went by. That's

the question. And I think it is a really valid question. To me that seems unfair that VAR went too far and that Egypt should have had that goal.

Having said that, as you know, Paula, what do you do about it now? I mean, the game is over. The game went on from that moment. You can't replay it.

You can't change the result because everything that happened after that 58th minute would of course maybe change depending and as you said,

Argentina had that three-goal comeback at the very end and Egypt lost. Egypt is going home and Argentina is moving on. But the controversy will

stick with this, you know, as many of them. But it is going to stick with this tournament obviously, and this World Cup as for as long as it lasts

and then probably much longer into sports history, as they say.

NEWTON: Yes, and again, something that was supposed to maybe correct some of the controversies or minimize the controversies is doing the opposite.

I really wanted to talk to you about this, Christine, just shifting gears here for a minute. The Olympics will open in L Ain two years and six days

from now. Who is counting? Probably you, Christine Brennan. You're probably the one who is counting. But we had this situation where the IOC, the

International Olympic Committee has now provisionally lifted a suspension of the Russian Olympic Committee and advised Olympic sports bodies to end

its three-year program where we remember this, that the Russian athletes who were vetted, they kind of get to participate as neutral.

does this really open up that the Russian athletes will be at those Olympics in L.A. with the Russian flag, with the anthem? And I say this,

Christine, because Ukrainians have pointed out that perhaps, maybe at this very hour, Russia is still bombing civilian infrastructure day in, day out

in Ukraine.

BRENNAN: That's right. The timing couldn't be worse for this decision from the IOC, in the sense of what we've heard and the deaths in Ukraine at the

hands of the Russians in the last few days.

But this is a decision that has been coming, or at least as anticipated. And by that, I mean, the Russian ban, the ban on Russia, which, by the way,

was doping, at least in some cases, going all the way back to 2016, as you said, the last three years based on the war in Ukraine started by Vladimir

Putin and Russia, there has been some cracks. There have been -- federations have been talking about having the Russians come back in some

way, shape or form.

And it was also not just Russian athletes, it was teams. So you couldn't have the Russian men's hockey team at the last Olympics in Milan a few

months ago that now looks like it might change.

Kirsty Coventry the IOC president, the first female president of the International Olympic Committee and an athlete, I covered a two-time

Olympic gold medalist in swimming in 2004 and 2008 said that she doesn't believe that athletes should be responsible for what the officials in the

country are doing, and that's certainly a feeling and a decision that is in keeping with the athletes' point of views.

[16:25:05]

So that's where she is coming down on this at this point. Obviously, if something horrible happens, even, I mean, it is always horrible, but even

worse, if Russian aggression continues, I would imagine there could be outcries.

Also individual sports -- track and field, for example, athletics, one of the biggest, probably the biggest sport in the Summer Olympics has said no,

they are still not going to allow the Russians and the Belarusians. And so there is going to be a lot of back and forth over the next two years, as

you said, and we will see how it plays out. But it is a very confusing, controversial issue that will probably go all the way to the doorstep of

the Los Angeles 2028 Olympics.

NEWTON: Yes, and can only hope that by then, of course, that there is some type of ceasefire and peace in the region, which will hopefully help some

of these matters.

Christine Brennan, thanks for laying it out. Really appreciate it. It is good to see you.

BRENNAN: You too, Paula. Thank you.

Now, the mayor of New York City says a Manhattan high-rise is now stable after structural columns buckled on Tuesday. Zohran Mamdani says that crews

are adding more shoring and beams today, though there has been no additional movement since yesterday morning.

The building is being converted from an office space into apartments, and this incident highlights the many challenges this type of renovation can

present. CNN business writer, Samantha Delouya joins me now.

And you've been writing about this. You point out that office to apartment conversions have surged since the pandemic, and it is definitely a way that

you get those desperately needed homes into a city like this. But as we saw in the last couple of days, not without its complications, this is not an

easy task.

SAMANTHA DELOUYA, CNN BUSINESS WRITER: Absolutely, Paula. These apartments or these office to apartment conversions have really, really exploded in

popularity in cities all across the country, especially in New York, due to the fact that these older office buildings have sort of fallen out of

fashion with the rise of remote and hybrid work.

And it is seen as a great way to get more housing into a city like New York, which faces a dire housing shortage. But as you can see from the

emergency yesterday, there are complications with these builds. And, you know, that's because offices are not designed to be livable spaces. And the

interior work that needs to be done to kind of make it work is extremely complicated and it often requires rebuilding and reworking the layouts, you

know, ensuring that there is enough natural light coming in, that can sometimes mean cutting into the middle of the building.

And so yes, you know, in this specific project, it was a former Pfizer headquarters and they are adding 19 stories on top of one of the two high

rises that is involved in this project, that architects warned me, you know, is extremely heavy. And these columns that you see here seem to have

buckled under being overstressed from the weight of that addition.

NEWTON: And in fact, you had an architect who said that when he saw the plan, he thought this perhaps was not prudent.

DELOUYA: Yes, exactly. So, you know, a lot of the older office buildings that were pre-war are ideal for these kind of conversions because they're

smaller, actually, larger doesn't always equal better. This Pfizer building is incredibly ambitious as a project to convert to apartments. That's

because it is so big. It is actually the biggest undertaking of one of these conversions in New York City's history, according to the architects

on the project.

But bigger means that, you know, you need to have enough natural light getting in, so you can't have apartments in the middle of the floor plan.

So it is kind of figuring out how to make sure there is enough natural light. You have to rework plumbing, you have to rework HVAC systems because

every unit obviously needs bathrooms, kitchens, natural light, like you said, central heating and cooling air systems.

So yes, this is an incredibly complicated project.

NEWTON: Sam Delouya, thank you for filling us in on that, on again, some of these conversions will go on not just in New York City, but all over the

united states and beyond. Thanks so much. Appreciate it.

And now we will join Jim Sciutto, who brings us our breaking news as the U.S. is once again striking Iran.

REP. ADAM SMITH (D-WA): A narrative of those who would like to be completely disconnected from the reality of where we actually are and where

we actually are, is we are absolutely in a war with Iran where lob missiles at each other, and we are -- our military force, as I mentioned, to break

them to the point that Trump wants to break them.

So Trump is basically trying to fight back against reality by saying, no, we are not at war. And of course, we've totally defeated Iran, and Iran is

going to do what I want. That's what he wants to believe in his own mind. Reality tells us a very, very different story.

JIM SCIUTTO CNN ANCHOR AND CHIEF NATIONAL SECURITY CORRESPONDENT: So let me ask you, it is a new vote in Congress on the President's war powers as they

relate to Iran, likely to be in the offing. As you know, back on June 23rd, very briefly, the Senate voted to move it forward and then two Republican

senators changed their vote and reversed.

Do you believe there will be the votes in the House now?

[16:30:20]

END