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The Brief with Jim Sciutto

Trump Meets Netanyahu In Florida; Ukraine Denies Targeting Putin Residence; Beijing Conducts Major Military Drills Around Taiwan; 2026 Global Economic Outlook; CNN Finds Evidence Sudan's Army Carried Out Ethnic Killings; Round One Of Voting Ends In Myanmar; Interest Rates And Affordability Loom As Key Issues For 2026. Aired 6-7p ET

Aired December 29, 2025 - 18:00   ET

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

[18:00:00]

JIM SCIUTTO, CNN ANCHOR, "THE BRIEF": Hello and welcome to our viewers, joining us from all around the world. I'm Jim Sciutto in Washington, and

you're watching "The Brief."

Just ahead this hour, U.S. President Donald Trump's Mar-a-Lago resort at the center of attempted global diplomacy. He hosted Israeli Prime Minister

Benjamin Netanyahu, hoping to initiate the second phase of the Gaza ceasefire plan. President Trump also says Iran might be using new sites to

rebuild its nuclear program. Russia says a Ukrainian drone attack targeted one of President Vladimir Putin's residences. Kiev calls that accusation a

complete fabrication. And as 2025 draws to a close, the winners and losers in the global economy. And what comes next? That conversation, plenty more

coming up.

We do begin in Palm Springs -- Palm Beach rather, Florida, where U.S. President Trump has been meeting with the Israeli prime minister. Benjamin

Netanyahu described their conversation as, quote, "very productive." Afterwards, the U.S. President praised his Israeli counterpart's attitude

and compliance with the Gaza peace plan and criticized Hamas for its continuing unwillingness to disarm.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: We talked about Hamas and we talked about disarmament. And they're going to be given a very short period of time to

disarm. And we'll see how that works out. Steve Witkoff and Jared Kushner will be in charge of that from our side. But if they don't disarm, as they

agreed to do, they agreed to it, then they'll be held to pay for them. And we don't want that.

(END VIDEO CLIP)

SCIUTTO: Their face-to-face meeting came as Trump is pushing hard to move on to phase two of his administration's plan for Gaza. He says he wants to

achieve it as soon as possible. However, many obstacles remain in the way. Another item on the agenda in Florida was the West Bank, where Trump hinted

that he disagreed with Netanyahu about Israeli actions and activity there, but said that a conclusion was coming. He didn't specify what that was.

Kevin Liptak is standing by in Palm Beach. And, Kevin, I wonder what this meeting was about. Was it a substantive discussion about concrete steps

towards phase two of the peace plan? Was it about Israeli domestic politics, given Netanyahu has an election coming up? What was accomplished

today?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, I think it was perhaps all of that. And, you know, Netanyahu kind of rushed down here to Florida,

very eager to meet with President Trump. It was his fifth meeting with him this year, by far the most meetings of any world leader. And I think he did

have a couple of objectives. One is to try and get President Trump sort of on his side when it comes to this issue of moving to phase two of the

ceasefire that President Trump so proudly traveled to the region to proclaim success on only a couple of months ago.

You know, When you talk to White House officials sort of behind the scenes, there are concerns that Netanyahu could be slow walking all of this, that

he isn't necessarily on the same page as the U.S. on how quickly they want to move into this next stage of the peace deal. But President Trump sort of

offered none of that when he came out and spoke. He said that he thought Netanyahu was on the same page as him. And he really put the onus on Hamas

to begin the disarmament in order to get to the next phase, and so really not belying any of the very real concerns that you hear from American

advisers about how all of this is proceeding.

The other objective that Netanyahu had was to try and inform President Trump about what he sees is the growing risk of Iranian ballistic missile

program. You know, the president and the prime minister had worked very closely together to take out some of those Iranian nuclear sites. But what

you hear from the Israelis is that their intelligence suggests that Iran is moving very quickly to advance the missile program. And President Trump did

seem convinced by that. He came out and said that there were growing concerns and that the U.S. would join Israel if they work to move to hit

and strike up against the ballistic missiles.

[18:05:00]

And so, on both of those fronts, it did seem like Netanyahu got what he was looking for out of President Trump. So, too, did he get that political

backing as he stares down that potential very difficult reelection campaign sometime over the next year. President Trump, very emphatic in his support

for Netanyahu, saying, quite remarkably, that he doesn't think Israel would exist at all without Netanyahu as prime minister.

And so, if Netanyahu was coming in to this looking for some sort of political backing, I don't think he could have asked for anything more. He

seemed to reciprocate that, too. He awarded President Trump the Israel prize, which has never been given to a non-Israeli before. So, you see a

lot of mutual sort of affection between the two men that I do think papers over some very serious tensions behind the scenes.

You know, President Trump has not been satisfied in the past about some Israeli actions in the region, whether it's striking directly inside of

Doha, whether it's striking inside of Syria. And he did -- those tensions did sort of surface very, very briefly when I asked him about the West Bank

and what President Trump's message was for -- on the settler violence in the West Bank. He's acknowledged that there were disagreements there. But

when I asked him to characterize what those disagreements were, he refused, essentially not allowing them to bubble up into the public.

SCIUTTO: Kevin Liptak in Florida, thanks so much. Well, Russia is accusing Ukraine of targeting one of President Vladimir Putin's residences in a

drone attack. It says, as a result, it will now revise its position in peace talks. Ukraine has denied that allegation.

President Volodymyr Zelenskyy called it a complete fabrication. He says the Kremlin is trying to undermine his talks with President Trump over the

weekend. After that meeting you see there, the president said he believed he was close to achieving a deal in Ukraine, but admitted some thorny

issues remain.

Republican Congressman Don Bacon sits on the House Armed Services Committee. Earlier, I asked him about the possibility of Ukraine being

forced to give up some of its own territory to Russia.

(BEGIN VIDEO CLIP)

REP. DON BACON (R-NE): I could see some willingness, maybe, at some of the territory that was already taken, perhaps. But that's up to the Ukrainians.

I think it's very wrong for the United States, though, to be pressuring Zelenskyy or Ukraine to give up territory. What it does is it rewards the

invader. And if you do this with Russia here, what will Russia do with Azerbaijan? What will they do with Georgia? What will they do with the

Baltics? And Russia is clearly a threat, and they're acting that way.

(END VIDEO CLIP)

SCIUTTO: Joining me now is the former U.S. ambassador to Ukraine, Stephen Pfeiffer. Thanks so much for coming back. Good to have you on.

STEVEN PIFER, FORMER U.S. AMBASSADOR TO UKRAINE: Happy to be here, Jim.

SCIUTTO: Lots to go over. First on this alleged strike on a home of Vladimir Putin, we shouldn't say Putin himself. President Trump says he

heard this from Vladimir Putin. You wisely made the point on social media that President Trump does have his own intelligence service that could

confirm if that was indeed true. Well, what's the impact of the president, in effect, taking Vladimir Putin's word for this?

PIFER: Well, I worry about that because I think Putin understands that he can feed a false story to President Trump, and President Trump takes it at

face value. I think in this case, the Russian claim doesn't pass the smell test. I mean, the residences of Vladimir Putin are some of the most heavily

defended sites in Russia. The Ukrainians aren't going to waste limited weapons on those sites.

Moreover, the Russians could not even get their lie straight. Foreign Minister Lavrov said the Ukrainians launched 91 drones against the

residents. The Russian Ministry of Defense last night reported there were only 87 drones -- 89 drones against Russia in total, only 18 of which were

against the Novgorod region, which is where this one particular compound of Putin's located. And people near that compound said they heard no air

defense engagement. So, the Russians are kind of disproving their own lie here. And it's a shame that President Trump accepted it.

SCIUTTO: Yes. I mean, it's not the first time, let's be frank, the Russian leadership has lied. We heard President Trump say yesterday quite an

amazing statement, given that we're close to four years into Russia's full- scale invasion of Ukraine. But he said that Putin wants Ukraine to succeed. Can he possibly believe that?

PIFER: Again, I don't know why he would say that. I mean, look at what the Russians have been doing to Ukrainian cities, Mariupol, Pokrovsk, Bakhmut,

Avdiivka. It's a chain of destruction. Putin doesn't want a successful Ukraine. He wants a Ukraine that is back in Russia's orbit, that is

subservient to Russia. And certainly, the last three years have persuaded Ukrainians that they don't want anything to do with Moscow.

[18:10:00]

SCIUTTO: Understood. And listen, yes, we see a lot of evidence of that every day. Give us your best assessment of where the peace process stands,

because we've seen a number of moments like this. President Trump meets with Zelenskyy. We've had the Europeans meeting with their U.S.

counterparts, et cetera. They seem to have come to some sort of agreement on what the Western position is here. Is Russia at all interested in actual

negotiation here or accepting some elements of that proposal?

PIFER: I think you're right, Jim. What we saw yesterday does appear that there is now convergence on a Ukrainian-American-European position. There's

still some questions to be worked out, and they're going to address those in January. But it's also, I think, very clear that the Russians have shown

no readiness whatsoever to move off to their original demands. The Ukrainians, on the other hand, have made some significant compromises.

I believe that Kyiv is prepared, and this will be a painful decision, to accept Russian occupation of some Ukrainian territory. But you've seen

absolutely no movement by the Russians. And then the question then becomes, is President Trump and the West, are they prepared to crank up the pressure

on Moscow to get the Russians to negotiate in a more serious way?

SCIUTTO: Yes. President Trump acknowledged today some thorny issues remain. And let's be frank, that's largely an understatement to some degree,

because among those thorny issues is the fate of Ukrainian sovereign territory taken by Russia by force and what happens to it. My understanding

is of the U.S. proposal that there is some scenario where the U.S. might recognize some of that territory as Russian. Europe would refuse to, and

certainly Ukraine would refuse to, but accept the battle lines to some degree as they are, and the U.S. officially recognize them. What would the

significance of that be for the U.S. to recognize land taken by force?

PIFER: Well, that would be, I think, a hugely bitter pill to ask Kyiv to swallow. I believe that the Ukrainians are prepared to accept the line as

it is now, but they talk about de facto acceptance of Russian occupation. They don't want that recognized.

And again, we have to ask, if the United States were to recognize Crimea or Donbas as Russian, we in effect have legitimized Russian use of force to

change borders. That's not something that you want to have become accepted in modern international relations.

SCIUTTO: Yes. And we should note, you know this better than me, but after the Soviet Union occupied the Baltic states, the U.S. never recognized

Soviet sovereignty over the Baltic states, even for many decades in the Soviet Union. Ambassador Steven Pifer, it's always good to have you on. Oh,

sorry, if you had a point, if I don't have that right, let me know.

PIFER: No, I was going -- I was just going to point out in, I think, 2019, Secretary Pompeo, during the first Trump administration, issued a statement

saying that the United States would never recognize Crimea's incorporation into Russia. So, again, Trump is reversing a policy he adopted just six

years ago.

SCIUTTO: Yes, no question. Ambassador Pifer, thanks so much for joining.

PIFER: Thank you.

SCIUTTO: Well, another hotspot we've been watching closely. China is beginning a massive series of military drills once again around Taiwan,

mobilizing army, navy, air and rocket units. Beijing says the drills will test combat readiness and, this is key, blockade key ports. That's

important. Big concern is a potential blockade.

Taiwan is accusing China of military intimidation. It says it is fully on guard. The move comes after Washington and Taipei agreed to what could

become one of the biggest ever U.S. arms sales to Taiwan early this month.

CNN military analyst, retired U.S. Air Force Colonel Cedric Leighton joins us. Good to have you back, sir. Let me ask you this, because this is

certainly not the first Chinese exercise around Taiwan. There have been many, but they have been getting bigger and more frequent. Does that

increased size and frequency indicate to you that Beijing is closer to making a decision to take military action?

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST AND U.S. AIR FORCE (RET.): Yes, Jim. Good to be with you again. It's -- yes, that is

absolutely the case, because what the Chinese are doing is they're not only increasing the volume of the military forces that are arrayed against

Taiwan, and as you mentioned, they come basically from all of the services of the Chinese People's Liberation Army. But what they're also doing is

they're exercising their ability to do joint operations.

So, what they want to be able to do is they want to be able to exercise what called command and control of the forces that arrive against Taiwan.

And the more effective the command-and-control elements are, the more effective a force is going to be when it comes to invading territory.

That's basically what we're seeing here.

[18:15:00]

And they're using this as a signal to indicate not only are they prepared to do it, but they're getting even better at the capacity that they need to

actually fulfill that kind of a mission.

SCIUTTO: One concern that analysts in the region have mentioned to me is that at some point one of these exercises around Taiwan becomes the

military action. In other words, it begins as an exercise, but you have the forces arrayed and suddenly the drill is actually an armed blockade. Is

that a genuine possibility?

LEIGHTON: Absolutely. And one of the key things about this is -- you know, exercises are often used not just by the Chinese, but by other forces as

kind of a cover for military operations. You array all those forces there. In fact, you know, in the run up to World War II, the Nazis did the similar

type things. They'd have exercises in the eastern part of Germany, but on the Polish border. Same kind of thing is happening here.

So, what the Chinese could potentially do is use these exercises as a cover for this kind of an operation. And when you look at the types of forces

that are arrayed, you've got the Coast Guard, you've got the People's Liberation Army Navy, you have the Air Force, you have the land component

and the rocket forces, and all of those elements are out there. And when they synchronize their ability to conduct these kinds of operations, it

just takes basically one flip of the switch, almost literally, to make it become an actual invasion or an actual aggressive action.

SCIUTTO: And I remember back in the days before Russia's full-scale invasion of Ukraine, a lot of claims from the Russian side, all these were

just exercises. I want to play a comment from President Trump regarding another field of military action, that around Venezuela. President Trump,

in the last several days, seems to have confirmed that a U.S. operation took place there. Have a listen.

(BEGIN VIDEO CLIP)

TRUMP: Yes. There was a major explosion in the dock area where they load the boats up with drugs. They load the boats up with drugs. So, we hit all

the boats. And now, we hit the area. It's the implementation area. That's where they implement. And that is no longer around.

(END VIDEO CLIP)

SCIUTTO: I mean, this could have been an airstrike, could have been a missile strike, could have been a drone strike, could conceivably have been

some sort of ground operation, perhaps a covert operation. What do you think is the most likely scenario here?

LEIGHTON: Well, if I had to bet on it, I would say it's probably a covert operation that the president has, for whatever reason, chosen to reveal.

You know, when you look at this, you look at, for example, on, you know, SouthCom's X feed or their website, they are not saying anything about this

whatsoever. And usually when it comes to this particular operation, they've always been very quick to tout any type of strike against a vessel, any

type of effort that they've done against the tankers, whether it's them or the Department of Homeland Security, but that has been publicized. In this

particular case, the people that have done this, the organization that did it, is not saying anything about it.

And, you know, whether or not it was as extensive an operation as President Trump indicates, it really points to some kind of a covert action that

probably was conducted by the CIA or something similar to that.

SCIUTTO: Is it dangerous or damaging to reveal a covert operation on foreign soil?

LEIGHTON: Absolutely. Because the reason you make these operations covert and put them in a special category is to provide what's known as plausible

deniability. And if you have a situation where your forces are caught by the adversary and, you know, they're paraded in front of cameras or

whatever, you can say, oh, they had nothing to do with this. Not my people. Not my area.

Now, often those denials ring hollow, but that's the premise is to, you know, when you do a covert operation that you can deny its existence and

it's not an official act of war, basically, at least that's how policy makers tend to tend to perceive it. But in this particular case, by

revealing it, it not only puts those forces in potential danger, but it also puts us at risk diplomatically and militarily.

SCIUTTO: Yes. Well, let's hope the operators on the ground were out of there before it went public. Colonel Cedric Leighton, thanks so much.

LEIGHTON: You bet, Jim.

SCIUTTO: Coming up on "The Brief," we're going to break down this year's economic landscape and look ahead to what 2026 might bring to the U.S. and

the global economy. Joining me, a man who knows it well, Mohamed El-Erian. That's next.

(COMMERCIAL BREAK)

[18:20:00]

SCIUTTO: President Donald Trump last month pledged to end the war in Sudan as part of his efforts to play peacemaker in conflicts across the globe. A

bloody civil war has been raging in Sudan for more than two years, with almost 12 million people displaced, according to the U.N.

In this CNN exclusive, Nada Bashir uncovers a chilling campaign of ethnically motivated violence carried out by Sudan's army and its allied

militias. CNN reviewed satellite imagery and obtained rare testimony from survivors and whistleblowers. I need to warn you, there are some disturbing

images in this important story.

(BEGIN VIDEOTAPE)

NADA BASHIR, CNN CORRESPONDENT (voice over): Sudan is in the grip of a brutal civil war. The government-aligned Sudanese armed forces are fighting

for control of the country against the rival paramilitary Rapid Support Forces, or RSF.

Almost three years of bloody fighting has led to the world's worst humanitarian crisis. And in recent weeks, atrocities committed by the RSF

appear to have reached new extremes with thousands reportedly killed.

Under the command of rival generals, both sides have been accused by the United States and the U.N. of war crimes, but abuse is carried out by the

Sudanese armed forces who are under the command of Sudan's de facto leader have been largely unreported and left in the shadows.

Now, a joint investigation by CNN and investigative newsroom, Lighthouse Reports, has uncovered a campaign of ethnically-fueled atrocities targeting

non-Arabs carried out by the Sudanese Armed Forces and their allies across Sudan's Jazira State.

The evidence is harrowing, bodies like in this video thrown into canals, some stripped, others with their hands tied, other victims buried in mass

graves and farming communities torched.

UNIDENTIFIED MALE: Anyone who appeared to be Nuba from Western Sudan or from the South was immediately shot.

BASHIR (voice-over): It's a campaign that was orchestrated from the top, four well- placed sources, including service security officials, tell us.

They say an official within Sudan's General Intelligence Service was involved in coordinating the attacks in Jazira State, and one of those

sources told us Army Chief Abdel Fattah al-Burhan was made aware of the killings.

January 2025, Jazira State, the Sudanese Armed Forces are advancing to recapture the strategic city of Wad Madani from the RSF. But as they

converge on the city, atrocities are unfolding. Video geolocated by CNN shows advancing troops stopped in the village of Keriba. Here, they detain

and assault young men, accusing them of belonging to the RSF.

[18:25:00]

As troops advanced towards the outskirts of Wad Madani, the violence continues to intensify. We verified several videos captured at this

intersection known as Police Bridge over a period of days, reconstructing evidence of an eventual massacre.

In this video, we see deadly clashes between army forces and RSF fighters who were ambushed as they fled Wad Madani.

The aftermath is distressing, bodies scattered across the street, some wearing the light fatigues of the RSF. Others are dressed in civilian

clothing.

In another video, a man is seen beaten and bloodied on the ground surrounded by soldiers. He is injured and appears to be unarmed. Just

seconds later, he is hit by a volley of gunfire.

The fate of others captured at Police Bridge is unclear. Many appear to have been detained and driven away, their whereabouts unknown.

The next day, fighters are seen relaxing in a courtyard beside Police Bridge. We can tell it was likely filmed in the morning from the cast of

the shadows on the ground.

The intersection appears to be cleared of the bodies seen earlier, suggesting that the Sudanese Army has regained control and armed combat in

the area is now over. But in just a matter of hours, this, the same courtyard becomes the scene of a massacre. The bodies of at least 50 young

men all in civilian clothing and unarmed, some are lined against the wall, pools of blood beneath them, gunshot wounds visible to the head.

UNIDENTIFIED MALE (through translator): You come from Mali, Libya, Chad.

BASHIR (voice-over): In this clip, a fighter claims the men are foreign, accusing them of being from other countries. The execution of civilians or

unarmed combatants is a war crime under international humanitarian law. We were able to track down a whistleblower from within the senior ranks of

Sudan's General Intelligence Service.

Speaking anonymously for fear of reprisals, the official told us that victims killed at Police Bridge were then buried in mass graves, civilians

alongside RSF fighters, an allegation we then verified through satellite imagery reviewed alongside the Yale School of Public Health's Humanitarian

Research Lab. Here, you can see five new patches of disturbed earth at Police Bridge in the days following the alleged killings.

And in this image, white objects consistent with wrapped corpses are visible in one of the graves. In subsequent imagery, the bodies appear to

have been covered with dirt.

But mass graves were not the only method used by the Sudanese armed forces and their allies to dispose of the bodies of their victims. We spoke to a

second whistleblower from Sudan's Intelligence Service. He told us that some of those accused of collaborating with the RSF were shot and then

thrown into canals.

Just four miles away in the village of Bika, the whistleblower said bodies were thrown into the water, some while they were still alive. Days later,

Sudan's de facto leader, al-Burhan, addressed his forces behind the very canal where, according to the official, the bodies were dumped.

Satellite imagery captured in May after water levels receded shows what appear to be dozens of bodies on the canal bed, meters from where the army

leader had stood.

Some 50 miles downstream, at least eight bodies are seen lodged along the same canal system captured in videos posted one week after the army seized

control of Wad Madani. The Sudanese Armed Forces in January condemned what they described as individual violations after the recapture of Wad Madani

and announced an investigation into the attack.

CNN has asked the Sudanese Armed Forces and its leader, al-Burhan, about the outcome and about the allegations within this report.

These horrifying attacks along the road to Wad Madani, however, were not isolated. They formed part of a wider campaign of ethnically- targeted

assaults carried out on at least 39 villages across Jazira State, which targeted the Kanabi, a non-Arab farming community often labeled by Arab-

aligned militias as Black Sudanese.

UNIDENTIFIED MALE: They agreed they don't want any black people here.

UNIDENTIFIED FEMALE: They said, we want to kill everyone. We will not leave anyone. They were shot in the chest, near the heart, and in the back.

UNIDENTIFIED FEMALE: Every few days, the canal would bring one or two bodies.

BASHIR (voice-over): A member of a U.N. fact-finding mission described the military campaign to CNN as a, quote, "targeted extermination of people

along ethnic lines," in some cases amounting to what they described as ethnic cleansing. It's an allegation that has also been laid against the

RSF during this war.

[18:30:00]

Months after the atrocities in Jazira State, there is no sign of accountability. And for now, justice for the victims remains out of reach.

Nada Bashir, CNN, in London.

(END VIDEOTAPE)

SCIUTTO: Such an important story. Well, coming up after the break, the first round of votes have been cast in Myanmar's general election. It's the

country's first election since the military seized power four years ago. More on that coming up.

(COMMERCIAL BREAK)

SCIUTTO: Welcome back to "The Brief." I'm Jim Sciutto. And here are the international headlines we're watching today. Yes, President Trump says he

had a, quote, "very productive" meeting with the Israeli Prime Minister, Benjamin Netanyahu. The two held talks at Mar-a-Lago about the Gaza peace

plan, attempts to move on to the later phases. Trump says he will try to get the plan's second phase going as soon as possible. To do so, though,

many obstacles remain, he says, among them, of course, Hamas must disarm within a very short period of time.

British boxer Anthony Joshua has been injured in a car crash in Nigeria. Local authorities say the driver of his SUV and another passenger were

killed in the accident. You see the aftermath there. The former heavyweight champion walked away from it with just bruises. Joshua is of Nigerian

descent and has family in the region.

A rapidly intensifying winter storm is sweeping across the central and eastern United States, the storm knocking out power lines, wreaking havoc

for those traveling for the holidays. At least one person has died in a traffic accident in Iowa.

Myanmar held the first round of a general election over the weekend. The polls, we should note, were only open in parts of the country. This is

Myanmar's first election since 2021, when a military junta then took control of the government. The junta claims that last election in 2020 was

rigged. That vote was won in a landslide by the National League for Democracy, led by Nobel laureate Aung San Suu Kyi.

[18:35:00]

She is now serving a 27-year jail sentence on a dozen charges, including bribery and corruption. Her party has been dissolved and left off this

year's ballot. The next two phases of voting are set for next month. The final one, January 25th.

Ivan Watson is in Yangon, Myanmar. I wonder if you could give us a sense, Ivan, of how voters feel about this election. Do they feel that their

voices will be heard?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, it was kind of hard-to-get people to really open up. There is a certain -- I think some

people definitely appeared worried about speaking to the press openly, in part because there's been a law passed that gives people very severe

penalties, years in prison, if you criticize the election.

So, there was a very different environment and atmosphere to this election as opposed to the 2015 national election, which I covered here in Yangon,

which felt much more festive and energetic. The military governments are arguing, however, that this was entirely free and fair.

(BEGIN VIDEOTAPE)

WATSON (voice-over): At polling stations across Myanmar's largest city, this song played on a constant loop: an anthem urging citizens to vote.

Myanmar's military is holding an election in the midst of a brutal civil war. The conflict, triggered nearly five years ago when the military staged

a coup, overthrowing an elected government, and violently crushing subsequent protests.

This voter told me he hopes the election would help Myanmar chart a way out of its difficult situation. My family live in the countryside where it's

not safe, he says. I want the fighting to stop and wish for peace.

The situation in this Southeast Asian country is dire. The U.N. predicts more than 12 million people will suffer from acute hunger in 2026, with

some 4 million people displaced by the war. Meanwhile, the U.N. special rapporteur for human rights calls the election a sham.

TOM ANDREWS, U.S. SPECIAL RAPPORTEUR FOR HUMAN RIGHTS IN MYANMAR: There has been an escalation of the use of sophisticated weapons of war. A

helicopter, gunships, jet fighters attacking civilian targets in the run-up to this election.

If the junta is successful in getting the international community to, in any way, recognize this as -- as legitimate, then it will be able to

entrench its brutality, and things in Myanmar are going to get much, much, much worse.

WATSON (voice-over): The military government concedes it can't hold the election in large parts of the country, now controlled by armed opposition

groups.

WATSON: Is it difficult to have an election when there's a civil war?

WATSON (voice-over): In Yangon, it's safe, says Myo Thein.

MYO THEIN, SPOKESPERSON AND CANDIDATE, USDP: No problem, no problem.

WATSON (voice-over): He's running for office with the military-aligned Union, Solidarity, and Development Party.

WATSON: You lost in the last two elections.

THEIN: Yes.

WATSON: Do you think you have a better chance in this election?

WATSON (voice-over): He has reason for optimism. The party whose candidates beat him twice can't compete in this election.

WATSON: These are the offices of the National League for Democracy, or NLD party. Now, it won conclusively in national elections that were held in

2015 and 2020. But since the coup, many of its leaders have been arrested and thrown in jail.

WATSON (voice-over): The U.K. and European Union say this election is neither free nor fair. But a Myanmar military government spokesman calls

their criticism irrelevant. The junta, trying to generate excitement for this controversial process. Two more phases of the election are scheduled

to take place in other parts of the country next month.

(END VIDEOTAPE)

WATSON (on camera): So, you know, it's interesting that that candidate from the military-aligned political party who lost the last two elections to the

now disbanded NLD party, he claims that he won on Sunday and that his party did quite well, which I guess is not much of a surprise when arguably the

most popular political party in the country is not competing.

It's interesting to note which countries have sent representatives to Myanmar to meet with the government this week. There was a Chinese special

envoy who met with Myanmar officials, and Russia sent members of its Central Election Commission here, and one of them was quoted in a meeting

with a top Myanmar official saying

[18:40:00]

And Russia sent members of its Central Election Commission here, and one of them was quoted in a meeting with the top Myanmar official, saying that

Russia believes that Myanmar can, in fact, hold free and fair elections. So, you have some supporters supporting this process amid criticism from

other Western circles. Jim.

SCIUTTO: Sure. Of course, we should note how elections are running in Russia. Ivan Watson in Yangon, thanks so much. And we'll be back right

after a short break.

(COMMERCIAL BREAK)

SCIUTTO: President Trump says his tariffs are actually creating great wealth and helping to boost the U.S. economy this year. Fed Chair Jerome

Powell says, in fact, those tariffs have contributed to inflation, which remains above the central bank's target of 2 percent. Many now expect the

Fed to hold rates steady until mid-2026, unless the job market in the U.S. weakens further.

Joining me now, Economist Mohamed El-Erian. He's the Rene M. Kern Professor at UPenn's Wharton School, also Chief Economic Advisor at Allianz. Good to

have you on, sir. Thanks so much for taking the time.

MOHAMED EL-ERIAN, RENE M. KERN PROFESSOR, WHARTON SCHOOL, UNIVERSITY OF PENNSYLVANIA, CHAIR, GRAMERCY FUNDS MANAGEMENT AND CHIEF ECONOMIC ADVISER,

ALLIANZ: Thank you, Jim.

SCIUTTO: So, lots of questions to ask you. I'm going to start with prices, if I can. Do you see any hard evidence that price pressure is easing in

this country? And this is a basic question. How can that happen when the Fed is loosening the money supply by lowering interest rates?

EL-ERIAN: So, what we see is inflation stuck at around 3 percent, and it's pretty stubbornly stuck there. Why is the Fed reducing interest rates?

Because the Fed has a dual mandate. The Fed has to maintain not only stable prices, but full employment. And we have evidence that the job market is

weakening. So, the Fed right now is more worried about the job market than it is about inflation, even though inflation is above its target.

SCIUTTO: Tell me your view of the state of the American economy, because I've been hearing for some time, and you know this far better than me,

about weak job growth. The Wall Street Journal theorized a couple weeks ago that the numbers might even be worse than the public numbers, might be even

overestimating growth. At the same time, you had a very strong third quarter GDP number. What's your best read of where the U.S. economy stands?

Is it in a phase of sustained growth?

[18:45:00]

EL-ERIAN: So, let's start with the GDP number you mentioned for the third quarter, which was 4.3 percent. That is high for the U.S. It's certainly

outperforming other countries, and it exceeded the consensus forecast of 3.2. So, the headline figure, Jim, is really impressive. If you look below,

you have a few things that make us worried.

One is that this high growth is coming with a weak labor market. So, we're having a decoupling of employment from GDP growth. Second, we have the so-

called K-shaped economy. The people who are well off are getting even better off, and the people who are worse off, the low-income households are

suffering. So, inequality is an issue. And then third, a lot of the growth came from A.I.-related investments, and people are worried that we may be

in an A.I. bubble.

So, the economy looks incredibly strong at the headline level, but when you look below, there's lots of questions that will be answered in 2026.

SCIUTTO: Is that a result of policy moves in this country? I mean, for instance, where the lion's share of the tax cuts went, for instance, or is

it other pressures or a combination of things?

EL-ERIAN: So, the growth is a result of the A.I. revolution and the fact that the financial markets are willing to throw money, literally throw

money at it, so that lots of firms, only a few of which will be winners, but lots of firms are able to build data centers and do all sorts of

things. That is the primary driver of growth.

The second driver is the resilient consumer. The low-income household in particular has proven more resilience than most people expect. They're

dealing with very high prices, a lot of debt, and now job worries. The third element is policy. Part of it is the tax cut, part of it is the

deregulation, and part of it is the tariffs. So, policy has had an impact, but it's third in terms of its importance.

SCIUTTO: Tell me about your view of how much impact tariffs are having, because there is a point of view, you know, that they've had less impact

and done less damage to the U.S. economy than initially thought. Do you buy that view, or are -- is there a lag effect here, or is it impacting things

in different ways?

EL-ERIAN: So, conventionally, economists have been humbled because the impact on both growth, which was expected to be negative, and inflation,

higher prices, has been much less than people expected. On the inflation side, it's been about a third of what people expected. So, the inflation

effect has been much less.

Where you see the impact of tariffs most, Jim, is in the budget. Receipts from tariff revenues have gone up enormously. So, that has helped a little

bit on the budget. We haven't seen the onshoring yet that people were hoping for. And, interestingly, and that's on the good side, we haven't

seen retaliation by other countries. Other countries have been willing to accept the higher tariffs without retaliating, which has also come as a

surprise.

SCIUTTO: Are companies still waiting to pass the cost of tariffs on to consumers? In other words, will we see a greater impact coming forward, or

is just the economy better able to absorb them than economists expected?

EL-ERIAN: Both. Some companies have waited, and for good reason. If you don't know whether the tariffs are going to stick, if you don't know

whether the higher cost you're paying is going to stick, then the last thing you want to do is upset your consumers, your clients, your customers.

So, you absorb most of the hit, and you only pass on a third.

Now, we have, as you know, the Supreme Court is going to judge next month on the legality of the tariffs. So, some companies are waiting for that. If

the tariffs stay in place, then we will see some more passing on to the consumer of the higher cost that companies are facing.

SCIUTTO: I want to ask you, if I can, about the president's continued comments about the Fed chairman today. He was quite critical, once again,

of Fed Chairman Jerome Powell. It's no secret in Washington that he's looking for a new Fed chairman who will be more likely to cut interest

rates. And perhaps be more likely to accept pressure from the president. How are the markets reacting to what might very well be a less independent

Federal Reserve?

EL-ERIAN: The markets are not worried as yet for two reasons, Jim. One, the people on the short list, the finalists, all five of them are highly

regarded and highly respected.

[18:50:00]

Second, there's a recognition that, at the end of the day, that's one vote. And normally, it takes time for the new Fed chair to impose his or her

authority on the rest of the committee. The committee votes. And the new chair is one vote short. It's one vote, a big vote, but it's one vote.

So, the market is saying, A, the candidates are credible. B, we shouldn't expect one person to completely change the dynamics on the Fed. So, they've

been quite calm about it so far.

SCIUTTO: OK. Final question, perhaps the most important question I'm going to ask you, is that you revealed on social media your dedication to the New

York Jets football team. And as a fellow New Yorker who has equally suffered from watching the Jets through the years, here is here is that

tweet, by the way, expressing your deep pain throughout. Tell me, how do you make it through? And are you going to stick with the team?

EL-ERIAN: I'm absolutely going to stick with the team. I'm loyal to the Jets, even though I'm miserable. And, Jim, I suspect you're miserable, too.

This has been an awful season. Look, we live in hope. Jim, I start every season with hope and then I get devastated. And somehow, I pick myself up.

I think there's something special about us Jets fans. Some people say we're crazy. I just say we're loyal.

SCIUTTO: We're loyal probably to a fault. And given that I'm a Mets fan as well with equal doses of pain and suffering. Anyway, I get it. I get it

from two directions. But I respect your loyalty.

EL-ERIAN: I'm with you. I'm a Mets fan, too. I'm with you. I'm completely with you, Jim.

SCIUTTO: Well, I'll see you in therapy then. Mohamed El-Erian, thanks so much for joining.

EL-ERIAN: Thank you.

SCIUTTO: Well, coming up, the actor Idris Elba is ending the year as a newly honored knight. We're going to tell you how he earned those honors

right after the break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Three, two, one. Happy New Year.

(END VIDEO CLIP)

SCIUTTO: Don't worry. You haven't missed it. That was just a test part of the preparation for the iconic New Year's Eve celebration in Times Square,

New York. In just a few days' time, around a million people will gather there for the famous ball drop. Celebrations will also feature more than

3,000 tons of confetti. Some of those gathered for the practice event told us how they're feeling about the upcoming celebration.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I feel great going into 2026. I just turned 26 today. So, I'm really looking forward to the new year. I'm very excited.

UNIDENTIFIED FEMALE: It feels great. Born and raised in Brooklyn, New York. So, it's fun to just, you know, be a tourist in my own city sometimes. So,

I had a good time.

(END VIDEO CLIP)

[18:55:00]

SCIUTTO: Well, of course, you could join us for New Year's Eve around the world as we bring you celebrations from across the globe. The party starts

December. I had a good time. Well, of course, you could join us for New Year's Eve around the world as we bring you celebrations from across the

globe. The party starts December 31st at 8:00 p.m. in Hong Kong, 11:00 in Sydney and noon in London.

And tonight, in the Good Brief, British actor Idris Elba has received a knighthood for his efforts, efforts to curb youth violence and knife crime.

The 53-year-old star has long been involved in campaigning work, launching the community focused, Don't Stop Your Future Initiative. Renowned ice

skaters Jayne Torvill and Christopher Dean, Torvill and Dean, were also honored with a damehood and a knighthood. Congratulations to them.

Thanks so much, all of you, for your company. I'm Jim Sciutto in Washington. You've been watching "The Brief." Please do stay with CNN.

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