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President Zelenskyy Calls For Creation Of Special Tribunal To Punish Russia; Putin Threatens To Use Nuclear Weapons; New York AG Files Lawsuit Against Trump, His Children And Trump Organization; President Zelenskyy Demands Punishment For Russian Crimes Against Ukraine; Fed Unveils Another Historic Rate Hike To Combat High Inflation. Aired 6-7p ET

Aired September 21, 2022 - 18:00   ET



WOLF BLITZER, CNN ANCHOR: The suit also targets Trump's three oldest children and the family's business, and asks federal prosecutors to consider criminal -- criminal charges. And as U.S. consumers reel from stubborn inflation the Federal Reserve takes yet another historic step. Interest rates now going up 0.75 point for the third straight time.

Welcome to our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

And let's get right to the breaking news on President Zelenskyy's very important speech before the United Nations General Assembly just moments ago.

CNN's chief White House correspondent Kaitlan Collins is over at the U.N. for us.

Kaitlan, Zelenskyy is calling for a special tribunal to punish Russia.

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, Wolf, this is recorded remarks that Zelenskyy just delivered to the world leaders gathered here in New York for this United Nations General Assembly, and he is talking about the death and destruction that Russia has caused in Ukraine. And Wolf, he wants action, specifically that court dedicated and created by the United Nations dedicated to punishing Russia and holding them accountable.

And, Wolf, he also wants Russia to be denied its veto vote that it has right now on the United Nations Security Council.


PRES. VOLODYMYR ZELENSKYY, UKRAINE (through translator): Special tribunal should be created to punish Russia for the crime of aggression against our state. This will become signal to all would-be aggressors that they must value peace or be brought to responsibility by the world.


COLLINS: And, Wolf, those are comments that President Zelenskyy made just a few hours after President Biden himself spoke. He stopped short of calling for Russia to be expelled from that Security Council where they have used the power of that veto vote to block action when it comes to Russia's own actions, and when it comes to Ukraine, though he did issue his own warning message.


JOE BIDEN, PRESIDENT OF THE UNITED STATES: You cannot seize a nation's territory by force.

COLLINS (voice-over): President Biden delivering a clear and forceful rebuke of Russia just hours after President Putin accelerated his war effort in Ukraine.

BIDEN: No one threatened Russia and no one other than Russia sought conflict.

COLLINS: On stage in New York, Biden accusing Russia of blatantly defying the heart of the United Nations charter.

BIDEN: A permanent member of the United Nations Security Council invaded its neighbor. Attempted to erase the sovereign state from the map.

COLLINS: Biden tweaked his speech but didn't dramatically change it after Putin mobilized hundreds of thousands more troops and criticized the West for arming and funding Ukraine.

BIDEN: Now, Russia's calling, calling up more soldiers to join the fight and the Kremlin is organizing a sham referenda to try to annex parts of Ukraine.

COLLINS: After Putin reminded the world that he too has nuclear weapons, Biden condemned his reckless remark with this warning.

BIDEN: They're making irresponsible nuclear threats to use nuclear weapons. A nuclear war cannot be won and must never be fought.

COLLINS: Biden speaking bluntly about accusations that Russia has committed war crimes and attempted to extinguish the Ukrainian population.

BIDEN: Whoever you are, wherever you live, whatever you believe, that should not -- that should make your blood run cold.

COLLINS: As he made the case that Russia is a threat to international order, Biden urged this international body to hold Russia accountable.

BIDEN: Because if nations can pursue their imperial ambitions without consequences, then we put at risk everything this very institution stands for, everything. COLLINS: Asked later if he had any further response Biden let his

warning speak for itself.

BIDEN: Nope.


COLLINS: Wolf, two other things that President Zelenskyy just asked for in this address that he delivered, he wants continued support when it comes to financial aid and, of course, artillery and shelling. Materials that he has needed, what you've seen the United States and other nations also supply. He also wants that price cap put on Russian oil and gas. That's what Russians used to finance the war.

And as you note, Wolf, at the end of his recorded remarks President Zelenskyy got a standing ovation here at the United Nations.

BLITZER: Yes, he did. All right, Kaitlan, stand by. We'll get back to you in just a moment.

But right now I want to get some more on Putin's threats and his military mobilization and the reaction that's coming in from Ukraine. CNN's Nick Paton Walsh is on the ground for us in the warzone.



NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR (voice-over): His biggest statement since he began the war that he still won't call a war delayed 12 hours until this morning and perhaps less drastic than feared, but still a huge move by Vladimir Putin who until now used this sort of volunteer recruitment process, declaring the first forced mobilization in Russia even if it is partial since World War II.

PRES. VLADIMIR PUTIN, RUSSIA (through translator): I repeat, we are talking only about partial mobilization, in other words, only military reservists primarily those who served in the armed forces and have specific military occupational specialties and corresponding experience will be called up.

WALSH: And behind it all the nuclear threat. Falsely claiming the West had threatened Russia and so Russia would use everything it had to defend its territorial integrity.

PUTIN (through translator): This is not a bluff. The citizens of Russia can be sure that the territorial integrity of our homeland, our independence and freedom will be ensured. I emphasize this again with all the means at our disposal and those who try to blackmail us with nuclear weapons should know that the prevailing winds can turn in their direction.

WALSH: The mobilization is a huge undertaking analysts said when they've already failed to supply, equip and effectively deploy their regular army over the past six months. It will not be quick. SERGEI SHOIGU, RUSSIAN DEFENSE MINISTER: 300,000 reservists will be

called up. I want to say straightaway this work will not be carried off as a one-off but in a systemic planned manner as I've already said.

WALSH: Unease already palpable on Moscow streets. Even if protests was as usual, muted and suppressed.

You always feel worried in moments like this, he said, because you have a wife and kids and you think about that. I would not want to leave them in case something happens.

The big question, amid all the rhetoric and threats of escalation, is does this change matters on the ground? Still, Ukraine pushes forwards despite slight Russian gains around Bakhmut. And Russia still struggles to match its status as a nuclear power with real progress and strategy on the ground.

Putin's bid to appear strong perhaps a reminder of how weak this war of choice has left him.


WALSH: Wolf, we are into a breakneck week likely here in Ukraine. Russia having called through its proxies in the region, freshly occupied areas for four separate referenda which will essentially by early next week probably come up with a very positive figure suggesting that even though these vote, sham votes as they are, were held under warzone conditions, under military occupation, that people living there want to be part of Russia.

That may then cause Moscow to say that these occupied areas of Ukraine, they essentially recognize as part of the Russian federation. That puts a lot of pressure on Ukraine in the coming week to possibly make some kind of territorial advances here to try and disrupt the sham voting process perhaps. But fundamentally what we heard today was Moscow trying to recontrol the narrative that slipped out of its hands after extraordinary Ukrainian advances over the past weeks, but probably essentially reminding people how far they've slipped over the past weeks -- Wolf.

BLITZER: Nick Paton Walsh for us in Kramatorsk in Ukraine. Nick, thank you very, very much. Stay safe over there.

Right now I want to bring back CNN's Kaitlan Collins. She's over at the United Nations along with CNN's chief national security correspondent Jim Sciutto, retired U.S. Army General Wesley Clark, he's the former NATO Supreme Allied commander, he's now a CNN military analyst, and the former U.S. ambassador to Ukraine, William Taylor.

Jim Sciutto, let me start with you. The Ukrainian President Zelenskyy's very forceful speech just delivered before the United Nations General Assembly. He's demanding Russia be punished for its aggression against Ukraine. What did you make of his remarks?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: It's not the first time he's demanded consequences for the Russian leader from the international community, but it's notable to me coupled with Ukraine's rapid advance and its counteroffensive in the north that the calculus has changed in this war, that he is now looking ahead to a point where not only does Russia not win in Ukraine, that Russia loses in Ukraine, Ukraine successfully defends its territory, but that Russia then faces consequences for it beyond the loss of its strategic objectives.

You've heard that from U.S. officials, European officials, NATO officials that Russia has already lost its strategic aims in Ukraine, and you see the Ukrainian president here perhaps emboldened by military successes on the ground as well as international support to be able to gaze into the future and that may be months or even years given Russia's mobilization before the war is over, but to gaze into the future and say, he needs to pay for this, right, so that this does not happen again either by Putin or other leaders who think they can get away with territorial expansionism at the point -- at the end of a gun.


BLITZER: Very strong remarks from President Zelenskyy indeed.

General Clark, let me get your reaction. President Zelenskyy's speech comes after this very significant escalation from the Russian President Putin today. Is the Russian leader from your perspective growing increasingly desperate right now perhaps increasingly dangerous at the same time?

GEN. WESLEY CLARK (RET), CNN MILITARY ANALYST: Well, yes, he is desperate and there's always been some risk of his use of nuclear weapons, but the 300,000 mobilization, that's a problem for months, and he doesn't have the equipment for them in any case when they're mobilized so that's really what he's covering up when he threatens with nuclear weapons. He knows that these -- use of nuclear weapons is not going to end this conflict for him. It's going to deepen the conflict.

But he's after the shock effect of the threat. He's after trying to deter nations sitting on the sideline from coming in against him, and he wants to weaken the Western resolve to assist Ukraine, and conversely, what he's doing is going to strengthen Western resolve and probably accelerate the flow of Western armaments to Ukraine.


CLARK: So, once again, he's getting exactly the opposite of what he's seeking.

BLITZER: I suspect you're absolutely right.

Ambassador Taylor, President Biden today reiterated that U.S. support for Ukraine in his word is unwavering during his speech at the U.N. today. How important was it for Ukraine and for the world for that matter to hear that message so loudly and so clearly coming from the president of the United States? WILLIAM TAYLOR, FORMER U.S. AMBASSADOR TO UKRAINE: Wolf, it's very

important that the Ukrainians hear that. They know that the United States is with them. They know the United States has been the main supplier of the weapons that General Clark just talked about. They know that that has been decisive in their success in these counter offensives in particular around Kharkiv, so the Ukrainians know the value of the U.S. support and to hear President Biden require that and confirm that and reassert that is very good for the Ukrainian morale.

BLITZER: Certainly. As you know, Kaitlan, you're there at the U.N. Your reporting that the Biden administration was not necessarily entirely surprised by Russia's bold announcements today, how did that influence the president's remarks at the general assembly?

COLLINS: Yes, they weren't really that caught off guard, Wolf. And you can kind of get that sense since you saw the National Security adviser Jake Sullivan come out yesterday. He talked about the sham referenda that they have been concerned about in saying, you know, this is something that we believe is in Russia's playbook, and it's something that they are going to do. So it didn't amount to this big rewriting of the speech today after President Putin had spoken and talked about mobilizing these forces.

They didn't know how many it was going to be and what he was going to call for, but they knew this was something that was an option for him. I think there's two things to watch, Wolf, as you know, the nuclear comments that President Putin made, the White House has kind of been downplaying that saying, you know, we haven't seen any action behind the scenes to match the rhetoric publicly yet, but, of course, when it comes to, you know, what Putin's next moves are going to be, that's something they're watching because he is clearly realizing at home just how bad his situation is and how it's not going in the direction he wanted -- Wolf.

BLITZER: Yes, it's not going his direction at all.

Just ahead -- guys, thank you very, very much. We're going to have more news including important news, legal trouble for Donald Trump. The former president just hit with a massive fraud lawsuit from the New York state attorney general who accuses him of practicing, and I'm quoting now, "The art of the steal."



BLITZER: Former President Donald Trump is facing yet another huge legal battle tonight. The New York state attorney general filing a civil lawsuit against Trump, his oldest children and the Trump Organization, accusing them of fraud on a level she calls staggering and astounding.

CNN justice correspondent Jessica Schneider reports.

(BEGIN VIDEOTAPE) LETITIA JAMES, NEW YORK ATTORNEY GENERAL: Claiming you have money that you do not have does not amount to the art of the deal. It's the art of the steal.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT (voice-over): New York's Attorney General Letitia James announcing she is suing former President Donald Trump and his three oldest children for lying to lenders and insurers for more than a decade fraudulently inflating the value of their properties all over the country.

JAMES: They violated several state criminal laws including falsifying business records, issuing false financial statements, insurance fraud and engaging in a conspiracy to commit each of these state law violations.

SCHNEIDER: James is seeking drastic remedies. Her lawsuit demands Trump and his family forfeit the nearly quarter billion dollars they've illegally gained over the years and she's looking to shut down Trump's business dealings in New York.

JAMES: We are asking the court to, among other things, permanently bar Mr. Trump, Donald Trump Jr., Ivanka Trump, Eric Trump from serving as an officer or director in any corporation or similar entity registered and/or licensed in New York.

SCHNEIDER: New York's attorney general filed this 200-plus page lawsuit after a three-year-long investigation. James also flagging what she says are possible crimes to federal investigators.

JAMES: We are referring those criminal violations that we've un uncovered to the United States attorney for the Southern District of New York and the Internal Revenue Service.

SCHNEIDER: James pointed to Trump's Fifth Avenue apartment as an example of the fraud. Trump allegedly claimed it was 30,000 square feet when it was actually 11,000 and he valued it at $327 million.

JAMES: To this date, no apartment in New York City has ever sold for close to that amount.


SCHNEIDER: James says the motive was to entice banks to loan them more money and to allow Trump and his companies to pay less in taxes.

SHAN WU, FORMER FEDERAL PROSECUTOR: Obviously there's tax fraud going on here given them massive inflation of these values.

SCHNEIDER: Trump has rebuffed James' investigation over the last three years.

DONALD TRUMP, FORMER PRESIDENT: My company is bigger, stronger, far greater assets.

SCHNEIDER: And he lashed out on his Truth Social page shortly after the lawsuit was filed saying, she is a fraud who campaigned on a get Trump platform, but James, a Democrat, running for re-election this year saying Trump cannot dismiss what her office uncovered as some sort of good faith mistake.

JAMES: White collar financial crime is not a victimless crime. Everyday people cannot lie to a bank and if they did, the government would throw the book at them. Why should this be any different?


SCHNEIDER: And the New York attorney general is also alleging Trump and his three eldest children lied more than 200 times when it came to asset valuations on statements over the course of 10 years and, of course, Wolf, this is a civil lawsuit that's been filed in New York state court. It would actually be up to the Manhattan DA's office or the U.S. attorney's office in New York to ultimately determine if there were criminal charges from all of these allegations that the AG has now brought to light.

BLITZER: Interesting, indeed. Thanks very much, Jessica Schneider, reporting for us.

Let's dig deeper right now. Joining us CNN correspondent Kara Scannell, CNN senior legal analyst Laura Coates, and Palm Beach County in Florida state attorney Dave Aronberg.

Laura, you just heard the New York attorney general describe the former president's business practices as what she called the art of the steal. What in your view are the key takeaways from this new civil fraud lawsuit?

LAURA COATES, CNN SENIOR LEGAL ANALYST: Well, look at the numbers. And again, these are allegations as rightly been pointed out. This is a civil context, not a criminal prosecution as far as we know, but a 220-page lawsuit, Wolf. We're talking about a $250 million request in penalties alone. Over a 10-year period over 200 valuation fraudulent- based statement and you've got the benefit of having Allen Weisselberg providing some testimony of some kind, and the most important aspect (INAUDIBLE) here is, unlike a criminal prosecution where the burden on the government is beyond a reasonable doubt talking about the civil context here.

So one's decision to invoke the Fifth Amendment saying, listen, I'm not going to say anything to build your case, government, I'm not going to incriminate myself. It's important here because in the civil context that can be used against you unlike in a criminal prosecution. So the fact they took the Fifth Amendment about issues laid with these issues is going to be problematic down the road but, of course, as was pointed out, she has campaigned in part on the idea of trying to prosecute or to sue Donald Trump, and so there may be this air of a political axe to grind but it cannot overwhelm and fatally undermine if there is evidence to support any of these allegations against this company and those who have been a part of it.

BLITZER: Kara Scannell, you were in the room when the attorney general, Letitia James, announced she is suing the former president of the United States, and you're outside her office right now so where does this case go from here?

KARA SCANNELL, CNN WHITE HOUSE CORRESPONDENT: Well, lawyers for the former president came out strong today saying that they called these claims meritless and said that they were going to fight each and every one of them. Now, James' office, we've asked her today at the court hearing, you know, she'd rejected a settlement offer from the former president before this case was announced today. She said her door is always open.

One other thing that she said, though, was that she believed that she found evidence that the former president had violated federal laws, specifically the law of bank fraud. She said that she made referrals to the U.S. attorney's office in Manhattan as well as the IRS. We've reached out to both of those agencies and they did not comment on this referral. Not saying whether or not they would take it up -- Wolf.

BLITZER: We'll see if they do. You know, Dave Aronberg, where does this lawsuit fall in the scope of current and potentially looming lawsuits against the former president?

DAVE ARONBERG, STATE ATTORNEY, PALM BEACH COUNTY, FLORIDA: Well, Wolf, this is a big deal, and although it's not a criminal case and people will focus on the Mar-a-Lago investigation because that could lead to criminal charges, this could still lead to hefty fines and the possible dissolution of the Trump Organization. Remember, the reason why Donald Trump's charity, the Trump Foundation isn't around anymore is because the attorney general, Letitia James is the one who sued to dissolve it.

And this case does appear strong and pretty compelling, and I think the extent and magnitude of these incorrect valuations couldn't be mistakes or rounding errors and one thing I think is particularly damning is the allegation that Trump fraudulently inflated the square footage of his own apartment from 11,000 feet to 30,000 feet. I mean, you know, people lie but tape measures don't.


BLITZER: Good point. You know, Laura, Letitia James, the attorney general, her lawsuit demands that Trump be banned from doing business in New York and seeks financial damages. But could this have any impact on his ability to actually hold federal office?

COATES: Well, not only they talk about the idea of barring that five- year period but also getting loans and assistance from New York institutions as well for the entire family if this were to stick. That has extraordinary ramifications here. Keep in mind one thing about having these state level allegation, it has nothing to do and cannot be undone by, say, a presidential pardon, not that I think President Biden would be inclined to do anything about that.

But in terms of being able to run for office there's the political aspect of it as to whether this will tip the scale for voters to say enough already, whether I like you or not, there's just going to be a continuous error, and this is not going to be a quick resolution. It could be many years down the road in a civil matter. BLITZER: Good point. You know, Laura Coates, Kara Scannell, Dave

Aronberg, guys, thank you very, very much.

Coming up, we'll have more on our top story. New threats from Vladimir Putin and a blistering response from President Biden. Is Putin bluffing? I'll ask a key White House National Security Council official John Kirby. He's standing by live. We'll be right back.



BLITZER: The breaking news tonight Ukrainian President Volodymyr Zelenskyy demanding punishment for Russian crimes against his country in a speech to the United Nations just a little while ago. His remarks coming as Vladimir Putin announces a major escalation in his totally unprovoked invasion of Ukraine. The Russian president calling up 300,000 military reservists and threatening to use nuclear weapons.

And joining us now from just outside the United Nations in New York, the National Security Council coordinator for Strategic Communications, retired U.S. Navy Admiral John Kirby.

John, thanks very much for joining us. So what's the U.S. response to Putin's pretty dramatic escalation today?

JOHN KIRBY, NATIONAL SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: I think you heard very clearly from President Biden what our response is. We find it irresponsible that any nuclear state such as Russia would continue to use this kind of dangerous rhetoric, which they frankly have been using since the beginning of the war seven months ago. It's irresponsible and we are watching this very, very closely, as you know, Wolf. We monitor as best we can.

We see no indication that we need to change our strategic deterrence posture at all right now, but what really needs to happen here is Mr. Putin needs to pull his troops out of Ukraine. He needs to end this war. He doesn't need to ratchet up the tensions by using this kind of irresponsible rhetoric and, by the way, he talked about being blackmailed. The only person blackmailing anybody else with the threat of weapons of mass destruction is Vladimir Putin.

BLITZER: But, as you know, Putin insists his threat to use nuclear weapons, he says, is not a bluff. Does the Biden administration view this, all this as a serious threat from Putin?

KIRBY: We take every threat by Mr. Putin seriously including when he uses that kind of rhetoric. We have to. It would be irresponsible if we didn't take it seriously. And that's why you heard the president talk about it so clearly today at the United Nations. Yes, we take it seriously. There's no reason for the war to escalate any more than it already has, my goodness. The devastation that has been wrought on the country of Ukraine, the death that has been wrought to the Ukrainian people, it needs to end and it could end today if Mr. Putin would do the right thing. Short of that, Wolf, we're going to make sure that we can help the

Ukrainians succeed on the battlefield so that they succeed at the negotiating table if and when it comes to that.

BLITZER: At the same time Putin and the Russians are saying that 300,000 military reservists are about to be called up. What is the U.S. assessment of the impact that those additional troops will have on the war in Ukraine?

KIRBY: I think it's too soon to know exactly. First of all if they get all 300,000 and then what are they going to do with those 300,000 inside Ukraine? Clearly Mr. Putin knows he's on his back foot. He knows that he has not achieved any measure of strategic success inside Ukraine and he knows that the Ukrainians now are on the counteroffensive in the east and in south so he's trying to shore up his defensive lines no doubt about that.

What kind of impact those numbers are going to have on the battlefield, I just don't think we can tell right now. What we do know, and Mr. Sullivan talked about this yesterday at the White House is that we're going to continue to make sure Ukraine has the weapons, the tools, the capabilities that they need to succeed against Russian forces however number they are and wherever they are inside Ukraine. We're going to continue to help make sure that they can succeed.

BLITZER: With this announcement of 300,000 additional Russian troops getting activated, is this a sign Putin is preparing to drag this conflict out and is the U.S. prepared for that?

KIRBY: It's a sign of two things, I think, Wolf. One, it is a sign that he knows he's struggling and we've been talking, you and I have been talking about this for a while about poor unit cohesion, desertions in the rank, you know, soldiers not wanting to fight. This is evidence that he now knows just how decimated his military forces are and how he needs to shore them up.

I think it's also a sign to your question that clearly he has no intention of ending the conflict right now and he certainly has no intention and his speech last night I think also made that plain to sit down and negotiate an end to the war with President Zelenskyy.


So it's obvious that there's going to be more fighting in Ukraine and that's why, again, we're going to continue to stand with Ukraine and make sure that they're able to prosecute that fight as best they can.

BLITZER: While I have you, John, as you know, two American veterans who were captured by Russian-backed forces while fighting for Ukraine are now free following a prisoner swap that was brokered by Saudi Arabia. Can you give us some insight into how this exchange unfolded and specifically the timing of it?

KIRBY: I think I'm going to let President Zelenskyy speak to this, Wolf. This is something that he and his administration worked very, very hard on, and I know that they're going to have some comments to make about that later so I think I'm going to defer to President Zelenskyy. Clearly, look, we're happy for the families, we're certainly glad to see that these two Americans will be able to join them soon. I do want to add that as happy as we are for the families, this is not the time for Americans to go to Ukraine to join the fight.

We've made it very clear. This is a very dangerous place. It's a warzone in every respect and we encourage Americans who want to help the Ukrainian people to do that through other means.

BLITZER: I should point out that five British citizens were also released as part of this exchange.

John Kirby, thank you very much for joining us.

KIRBY: You bet. Thank you.

BLITZER: And just ahead, the Federal Reserve here in Washington takes drastic action to tame inflation in the United States, significantly raising interest rates yet again.



BLITZER: The U.S. stock market is down again tonight after the Federal Reserve announced another 0.75 percentage point interest rate hike in an effort to try to fight inflation.

CNN's Matt Egan is joining us now. He's over at the Federal Reserve here in Washington.

Matt, a rate hike of this size three times in a row is highly unusual, of course. Tell us more about this drastic decision from the Federal Reserve today.

MATT EGAN, CNN CORRESPONDENT: Well, Wolf, the Federal Reserve continues to deliver tough medicine designed at curing the U.S. economy's inflation problem. That officials unanimously voting today to raise interest rates by 0.75 percentage point to the highest level since 2008. This is a monster size move and it is the third one in a row. We just haven't seen anything like that in the modern Fed era. At least not since under Paul Volcker in the 1980s.

All of this means higher borrowing costs for consumers, credit cards, car loans and mortgages where rates have already spiked. The goal here is simple. Get white hot inflation under control. The Fed is trying to slow down the economy to give supply a chance to catch up with demand. Of course, this won't be simple because the Fed is actually late to this inflation fight so they're being forced to play catch-up.

They're not tapping the brakes on the economy. They're actually slamming the brakes and that carries some risks here. Unfortunately, the Fed is nowhere near ready to declare victory in this war over inflation. Fed chair Jay Powell, he said today that they're going to stay at it until the job is done. Fed officials are penciling in significantly higher interest rates this year, and next. And this is going to deliver some degree of pain to main street in the form of potentially job losses, slower economic growth, the Fed officials, they actually downgraded their views on GDP and on unemployment.

This gloomy review from the Fed signals they are willing to stomach some economic pain here, Wolf, if that's what it takes to get inflation under control.

BLITZER: CNN's Matt Egan over at the Federal Reserve. Thanks very much.

Let's get some more on all of these dramatic developments. Joining us now CNN Business correspondent Rahel Solomon.

Rahel, so what does this rate hike going to mean for Americans and for that matter for the U.S. economy?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, Wolf, for the economy it will mean more slowing. For us consumers it's going to mean we're probably going to pull back on spending in part because of this, because the cost of borrowing as Matt rightly pointed out is going up for practically anything with an interest rate. Mortgage rates, by the way, the average 30-year double what we saw at the beginning of this year.

Credit cards are at their highest level since 1995 and car loans not much better. They're at their highest level since 2012. That according to Bankrate. And take a look at the impact we're already seeing, Wolf, in the housing market. I mean, home sales have fallen off a cliff. They're down 20 percent in August compared to a year ago. All of this, of course, to try to tackle inflation that is still hovering at 40- year highs. The last CPI report putting it at about 8.3 percent.

Now, Wolf, the Fed would argue that this is a necessary evil. It's, in fact, the lesser of two evils arguing that if you don't tackle inflation now by raising rates aggressively as they are, well, you're going to have to deal with it later and it will be a tougher problem to solve later. That said, people are feeling a squeeze, right, on the one hand you still have prices that are elevated. On the other hand you have the cost of borrowing continuing to go up, which the Fed made clear that not only have we seen rates go up this year, but they're not done yet.

We're going to continue to see rate hikes at least until next year and we're not expecting rate cuts until 2024. So we are going to be in this cycle for quite some time, Wolf.

BLITZER: Yes, and there's a lot of concern out there that it could lead to a recession here in the United States as well.

Rahel, thank you very, very much.