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Connect the World
Fury Grows in Israel Over Delayed Release of Hostage Remains; NATO Weighs its Response to Russian "Aggression"; Supply of Weapons to Ukraine Topping Agenda at NATO Meeting; Former Kenyan Prime Minister Raila Odinga Dies at 80; Volatility Index Climbs Amid Rising Trade Fears. Aired 9-10a ET
Aired October 15, 2025 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
CHRISTINA MACFARLANE, CNN HOST, CONNECT THE WORLD: This is the scene in Khan Yunis right now as calm holds for now after the Gaza ceasefire plan
was signed, but outrage is growing in Israel over the fact that more deceased hostage bodies have not been returned home.
It's 04:00 p.m. in Khan Yunis, and it is 02:00 p.m. here in London. I'm Christina Macfarlane in for Becky Anderson. This is "Connect the World".
Also, this hour, Ukraine back in focus, as the U.S. Defense Secretary tells allies, firepower coming. Six killed after the U.S. strikes again off the
coast of Venezuela.
Those are a few of the international headlines that could have some Trump voters wondering if America really is still first. We'll dive into that CNN
analysis. The stock market in York opens in about 30 minutes from now. Pictures are all currently in the green as some earning reports come in
strong, but there's a general vibe of volatility on the markets that we will discuss around the opening bell in about half an hour's time.
Israel's military says one of the four bodies handed over by Hamas on Tuesday was not an Israeli hostage. The militants have so far returned the
remains of eight people under the ceasefire agreement. Seven of them confirmed by Israel as captives taken during the October 7th attacks.
All 28 deceased hostages were supposed to be handed to Israel by Monday under the deal. The slow pace of their return is frustrating the Israeli
public and the government, which is now responding by restricting the flow of aid into Gaza, according to the U.N. Salma Abdelaziz, been following
developments and joins us here now.
So, Salma, what more are we learning this hour about that one hostage body that does not appear to be Israeli?
SALMA ABDELAZIZ, CNN CORRESPONDENT: Let me set the picture first. So, you had this Monday deadline. As of that point, there was only four hostages'
bodies that had been released. There was this rush, and I know we have video of these Red Cross vehicles going in the middle of the night to
retrieve four more bodies in an attempt, of course, to fulfill that requirement in the deal.
Now, the Israeli military says that, after forensic testing, only three of those four bodies belong to hostages. One source saying they believe that
fourth body is actually a Palestinian individual. Another source saying they believe that this may have been misidentification on the part of
Hamas, rather than an intentional mistake.
Now there is precedent for this. This has happened before, unfortunately, in February of this year, if you remember Shiri Bibas, the mother of two,
who had been kidnapped during October 7th. The body originally returned to Israel as her own turned out to be that of a Palestinian woman.
A day later, Hamas did hand over her body. So, there is hope that this will be resolved. But what it does mean, bigger picture wise here, is there are
still 21 deceased hostages that remain inside Gaza, but, and here's the important but for months now. Prime Minister Netanyahu's own intelligence
assessments have indicated that Hamas will be unable to retrieve all 28 of the dead.
Some may simply have been lost to war. Some may be held by other factions. The question mark here is, well, how can Hamas fulfill that part of the
deal, if intelligence says they can't even get all those bodies.
MACFARLANE: Yeah, and we also have from the International Red Cross saying just yesterday that the process of recovering bodies was always going to be
a slow one. But despite that, it is Palestinians, once again, who are suffering the brunt of this, with those moves from the Israeli government
to restrict aid from coming now into the Gaza Strip.
What are you hearing about the number of trucks that are getting access and where those access points may be?
ABDELAZIZ: So, the United Nations says that today, the number of aid trucks that will be allowed into Gaza has been cut in half. So, we had 600 aid
trucks going in the last couple of days. We now will have today only 300 aid trucks going in. Humanitarian workers will tell you that is not enough.
They are trying to stem what is a massive tide of a humanitarian crisis on the ground. Not only that, here's the other concern. Some members of
Israeli security are suggesting that the border crossing, that a border crossing, be cut completely, meaning cut off aid completely.
Some are suggesting that the Israeli military reenter parts of Gaza it has withdrawn from. So, you'll remember the Israeli military now controls about
50 percent of the Gaza Strip. Some are suggesting it should reassert its control in other parts of Gaza where it's withdrawn.
[09:05:00]
Fundamentally, what I'm talking about here is that this ceasefire agreement, the cracks are beginning to show here in this moment.
MACFARLANE: Yeah, just days into what is phase one, and you know, talk already of phase two, we'll see. Salma Abdelaziz, thank you. Now the
agonizing wait continues for the families of the remaining deceased hostages whose bodies have still not been handed over.
That includes 19-year-old Itay Chen, an American-Israeli citizen and soldier with the Israeli Defense Forces who was killed during the Hamas led
October 7th attacks. The IDF says Chen's remains were taken into Gaza after he was killed. His father spoke to CNN earlier today and expressed
frustration and disappointment over the delay.
(BEGIN VIDEO CLIP)
RUBY CHEN, FATHER OF DECEASED HOSTAGE, ITAY CHEN: Yes, if we just go to the facts, it's been 96 hours when it was supposed to come out, 48 hostages,
and 96 hours have passed by, and we only have 28, 27 of those hostages out. I don't think that was the intention of the agreement that was put in
place, and definitely not for the United States, that out of those 48 there were two U.S. citizens that have not come out yet.
My son is no less of a hostage than the other 27 that came out over the last couple of days, and he is a U.S. citizen. And I hope being a U.S.
citizen that matters. I hope other U.S. citizens listening to me now, and might be traveling abroad, and, God forbid, someone might take them.
It should be a liability, not an asset, to take U.S. citizens out. And it's also inconceivable that Russia got all of its citizens out. Germany, France
got their citizens out, but the U.S. still have two citizens left behind. What does that mean about being a U.S. citizen?
(END VIDEO CLIP)
MACFARLANE: Well, the ceasefire plan and relative calm on the ground in Gaza has not stopped anti-Israel protesters in Spain from showing their
solidarity with the Palestinians. This was the scene earlier today in front of the Spanish Foreign Affairs Ministry in Madrid.
Reuters reports Spanish unions were there calling for a general strike in solidarity with Gaza. U.S. President Donald Trump is touting another U.S.
military strike targeting a boat off the coast of Venezuela in which six people were killed. The president claims the vessel was affiliated with
Narco-terrorists, though neither he nor the Pentagon have provided any proof of that.
This is the fifth such strike in the U.S. has announced in the past several months, and it's likely to further inflame tensions with Venezuela, where
President Nicolas Maduro is preparing to declare a state of emergency to protect his country in the events of an attack by the United States.
Happening today NATO Defense Ministers are meeting in Brussels to discuss how they can ramp up their response to Russian aggression. U.S. Defense
Secretary Pete Hegseth says NATO allies will buy even more American weapons for Ukraine under a key arms initiative.
(BEGIN VIDEO CLIP)
PETE HEGSETH, U.S. DEFENSE SECRETARY: Fire power, that's what is coming. We expect and is coming from NATO. You get peace when you are strong, not when
you use strong words or wag your finger, you get it when you have strong and real capabilities that adversaries respect.
And I believe that's what NATO is doing. I believe that's what the pearl initiative is. So, our expectation today is that more countries donate even
more, that they purchase even more, to provide for Ukraine, to bring that conflict to a peaceful conclusion.
(END VIDEO CLIP)
MACFARLANE: Well not on today's agenda. American made Tomahawk missiles for Kyiv. President Trump says he expects Ukrainian President Volodymyr
Zelenskyy to push for those tomahawks when the two leaders meet at the White House on Friday. Our Fred Pleitgen has been following developments
from Berlin.
And we will speak to him on this in just a few minutes. But first, let's look at the bigger picture, the United States deepening involvement in
conflicts, raising important question, are Mr. Trump's actions in line with his America first campaign promises? Just this week, he's bragging about
wiping out yet another boat off the coast of Venezuela.
Then you have the Gaza deal, where the president is raising speculations about a U.S. military role in the disarmament of Hamas. There now appears
to the potential of U.S. Tomahawk sending up in Ukraine, which could set off a showdown with Moscow. And to top it all off, he's offering a $20
billion bailout his friends, Argentine President Javier Milei and amidst a U.S. government shutdown.
Will have seen CNN Senior Politics Reporter Stephen Collinson writes, Trump's new zeal for global entanglements might surprise MAGA voters who
thought the president meant to exclusively take care of business at home. Stephen has joins us now live from D.C. Stephen, Donald Trump will claim,
and he does, of course, that his actions in foreign affairs do amount to or are in aid of America First.
But how much is all of this muddying the waters with his base?
[09:10:00]
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: I think you've started to see a few expressions of concern on a number of fronts. There's been talk
in the Middle East and even in the United States about whether American troops would in some way go into Gaza to stabilize the situation in recent
days.
The president yesterday warned, for example, that if Hamas does not disarm, we will, that raised all sorts of questions about how he would do it. There
had previously been the thought that American troops would only be there as an advisory capacity. The thought that the President could end up providing
cruise missiles to Ukraine to allow it to strike deeper into Russia.
I think if that happened, that would be of great concern to the Trump base, especially because he spent two years running for reelection in 2024
basically arguing that America should not be putting more hardware, at least its own hardware, into the fight in Ukraine. So, I think there are
questions that will be raised politically.
At the same time, I think America First has not always been understood. It doesn't necessarily mean isolationism and the U.S. stepping back from any
action overseas. I think it really adds up to operations like the Iran strike against the nuclear facilities, where the United States used power
quickly and an overwhelming force and then left.
I think when Trump talks about America First, he's talking about not getting bogged down in long term conflicts like the ones in Afghanistan and
Iraq, which went on for years, almost two decades, in the Afghanistan context, and in fact, created a sense of political anger back home that
contributed to his political rise.
MACFARLANE: He's always -- Trump has always managed to sort of seamlessly blend his own interests with that of national interests as well. And it's
not clear in this moment ever, really, if it is an America First position he's taking, or a Trump first position, which I guess in itself, is
something of a skill. What do you view of the sort of blurring of those lines?
COLLINSON: Yeah, almost everything that Trump does at home and abroad is about using whatever leverage he has, whether its domestic troops going
into U.S. cities or whether he's, for instance, imposing duress on NATO forces -- NATO states to try and get them to spend more on defense.
It's a binary situation whereby Trump is using leverage and American power to increase his own power. That was where the Middle East peace
breakthrough was so interesting really, because it was a much more altruistic undertaking by Trump, which was more typical of previous U.S.
Presidents.
But I think what you make a good point. You know, a lot of the reason why this Middle East peace initiative came to fruition was because of Trump's
relationships with the Arab states, Saudi Arabia, Qatar, but there are all sorts of ethical questions in the United States about the crossover between
Trump's business interests and American national interests.
After all, Qatar gifted Trump a $400 million jumbo jet that he wants to use as the new Air Force One. So, it's very blurry. You're right. But I think a
good rule of Trump, when look -- some when looking at Trump's actions, is to consider, where does Trump benefit from this himself, and more
importantly, how does it enhance his power?
So, if he ends up giving cruise missiles to Ukraine, and that's certainly not decided yet. It could be to bolster his own reputation and to repair
his embarrassment over being outmaneuvered by President Vladimir Putin, as much as it is through any sudden desire to protect a democracy in Eastern
Europe from Russia's invasion.
MACFARLANE: Stephen, you write in your article for CNN that the foreign policy in his second term has an added dimension, and that is his desire
for personal prestige. And of course, we've seen that play out in his very public desire to win the Nobel Peace Prize this year, which, of course, he
did not do.
So, it's no wonder, Stephen, that he has been somewhat upset by the front cover of "Time" Magazine this week who posted a rather. I'm sure you saw an
unflattering picture of Trump there on the front page, to which he responded. I suppose the question Stephen is, was this deliberate? I just
wondered what your view on that was.
COLLINSON: I don't know. You know, it looks like time is trying to promote a story that says Trump is a very powerful global figure. I guess it gets
to some of the vanity of Trump. What is really quite ironic is that Trump, in many ways, in his media habits, at least notwithstanding his master of
social media, seems to live in the 1980s.
[09:15:00]
He still has a certain reverence for magazines like "Time" and "The Prestige" even of "The New York Times" and "The Washington Post", even
though, you know, he spends most of his time attacking them. In fact, years ago, Trump dummied up false covers of time to show his properties with him
on the front being declared Man of the Year.
So, this is rather unironic spat in many ways, but it does show, I think, how Trump's personality and personal prestige and authority is at the
center of everything he does, and how conscious he is of that particularly, more so than many other presidents. All presidents have a certain amount of
vanity, I think.
It comes with the job and the need to project power internationally. But Trump, I think these qualities are far more advanced than we've seen in
other presence.
MACFARLANE: Yeah, that's certainly one way of putting it, isn't it? Stephen, always great to have your analysis. We appreciate it. Thank you.
And I want to get some more detail now on the U.S. latest moves on Ukraine, as we reported, Defense Secretary Hegseth is telling that group of allies
in Brussels that firepower is coming, but what and when.
CNN International Correspondent Fred Pleitgen has been covering Russia's invasion of Ukraine since it began. And Fred, you know, as we were
discussing there, it feels like there is some touching on the Middle East. There is some momentum now behind Trump's push for peace in other areas in
Ukraine, given the progress that we've seen.
But on the subject of Tomahawk missiles, you know, which he has floated again this week. Did Defense Secretary Hegseth have anything to say on
that?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yeah, it's certainly something that President Trump has been dangling or floating, if
you will, but really hasn't committed to yet. He said that he said that he believes that when President Zelenskyy arrives at the White House on
Friday, that it's something that President Zelensky will want from the United States.
But certainly not something where a final decision has been made yet. And that's really the same that we heard from Pete Hegseth, the Secretary of
War of the United States today, as well, where he said more firepower is coming, but specifically did not speak about those Tomahawk cruise
missiles, but spoke about the kind of weapons that European and other NATO countries are procuring or paying for from the United States to then be
transferred to Ukraine.
And that certainly is a program that even NATO says they want to expand on. I was just listening to a press conference with Mark Rutte, the Secretary
General of NATO. He was asked the question also about potential Tomahawk missiles going to Ukraine.
He said it's not something that he wants to or can touch on in the NATO context, because first and foremost, that is a bilateral decision between
the United States and Ukraine, meaning that either the United States would give those missiles to the Ukrainians, or would allow European or other
NATO members to purchase those missiles from the United States to then give them to Ukraine.
However, even in that case, it would be the U.S. President Trump having to sign off on a decision like that, to transfer those missiles to Ukraine for
their use in whatever ways the Ukrainians would be able to or would be capable of using them. So, NATO says that, that program is continuing of
generally purchasing weapons.
But Tomahawk missiles are definitely something that the U.S. will have to decide. We'll have to make a call on. Certainly, that's something where a
lot of people are looking towards Friday. However, that program to purchase more weapons from the U.S. to give to Ukraine, that really seems to be
something that's gaining steam.
Mark Rutte also saying that one of the things that came out of that NATO meeting today is that more NATO member states have, in fact, signed off to
paying for weapons from the United States to then give those to Ukraine. It was six member states at the beginning pledging about $2 billion in a pot
to buy acquire weapons from the United States, first and foremost, interceptor missiles for air defense systems.
But that that number has now risen to more than half of NATO member states. So certainly, around 16 of the NATO member states apparently now on board.
That is something that NATO says they believe is a success for them. And certainly, also comes at a very important time here on the European
continent, where not only the war in Ukraine is continuing, of course, in a very brutal way.
But also, of course, NATO member states say that they have faced, for instance, Russian jets flying over NATO territory, even though the Russians
continue to deny that. But also, that Russian drone incursion that happened in Poland a couple of weeks ago. Right now, a lot of European NATO member
states remaining on edge.
And this certainly today was something they say was an important show of unity in the alliance, Christina.
MACFARLANE: All right, Fred Pleitgen for us there as we look ahead to that meeting between Zelenskyy and Trump this Friday. Appreciate it, Fred. Thank
you.
[09:20:00]
OK, up next. Audible grief in Nairobi, after a long-time opposition leader dies. We'll explore how Raila Odinga emerged from a chapter of political
violence as a symbol of unity, but what was his ultimate legacy? And torrential rain and swale and rivers have given way to incredible scenes of
destruction.
(BEGIN VIDEO CLIP)
VALERIA LEON, CNN CORRESPONDENT: This house was completely destroyed following the intense rains across central Mexico, killing a woman inside,
while the family was left with nothing.
(END VIDEO CLIP)
MACFARLANE: The danger in Mexico, though, isn't over yet. That full report just ahead.
(COMMERCIAL BREAK)
MACFARLANE: Kenya's Former Prime Minister Raila Odinga has died at the age of 80. He held that office from 2008 to 2013 and also served as a pivotal
leader in Kenyan politics for decades. His work as a pro-democracy activist led to important political reforms, including multi-party democracy and a
new constitution.
CNN's Larry Madowo is joining us now from Nairobi with more on Odinga's life and legacy and how is his passing, Larry, being felt there in Kenya?
LARRY MADOWO, CNN CORRESPONDENT: Christina, there's been an outpouring of grief across the country, people weeping on the streets, and I've just
returned from his home here in Nairobi, where crowds have gathered of mourners, politicians, business leaders, come to pay their respects to his
family home and to remember a man who was a colossus as President, William Ruto described him the father of democracy in Kenya.
It is because of his struggles that Kenya is one of the freest democracies in Africa. He went to detention in the 80s so that Kenya could have
mortified democracy in 1991 and again, through his efforts that Kenya ushered in a progressive new constitution in 2010. He was a man who never
made it to president.
The farthest he ever went was to prime minister in 2008 but whose support was so critical to the last four Kenyan Presidents, that is, that they
struggle to govern without his support. And even after running against President William Ruto in 2022 and losing that election, President Ruto
needed his support, and he has members of his party in the current cabinet. This is how President Ruto remembered him.
(BEGIN VIDEO CLIP)
WILLIAM RUTO, PRESIDENT OF KENYA: A fearless freedom fighter and a tireless warrior of good governance. Raila Amolo Odinga's name will forever be edged
in the story of our Republic, a story of struggle, sacrifice, courage, rule of law, hope and of our pursuit for excellence. For decades, Raila
dedicated his life to the pursuit of justice, equity and freedom.
(END VIDEO CLIP)
[09:25:00]
MADOWO: Raila Odinga was probably the most consequential Kenyan Leader of the last three or four decades, and one of the most recognizable opposition
figures in all of Africa, and that Kenyan President right now, William Ruto, was an ally turned foe turned ally again, of Raila Odinga, he's now
declared seven days a national mourning.
Flies will fly at half mast, and he says the former prime minister will receive full state honors at his state funeral. When that happens, it's yet
to be announced that he died in India while receiving treatment, Christina.
MACFARLANE: Such a dominant force in Kenyan politics. There'll be such a vacuum left now by his death. Larry Madowo there live from Nairobi. Thanks.
Let's get you up to speed on some other stories that are on our radar right now. For the first time, the U.S. has dropped out of the world's most
powerful passport list top 10.
The Henley Passport Index says the U.S. is now at 12. Singapore, South Korea and Japan are ranked one, two and three. The index says a measure of
what makes passport powerful is the ability to slip into global destinations with a quick show of passport, no visa required.
Russia's Vladimir Putin and Syria's new leader met over lunch to talk about the fate of Russian military bases in Syria in their first face to face,
Ahmed al-Sharaa was also expected to ask the Russian President for economic concessions and hand over ousted leader Bashar al-Assad for trial, Russia
granted asylum to Assad and his family.
The Mexican government says torrential rains have killed at least 64 people, with dozens more still missing, and thousands of homes are damaged
or destroyed. CNN's Valeria Leon has more.
(BEGIN VIDEOTAPE)
LEON (voice-over): Scenes of destruction as torrential rain and heavy landslide devastates several Mexican states, entire communities submerge.
Homes torn apart, overturned tractor, stranded cars, livestock swept away, fuel trucks, gas stations, lying rooms, roof crumbled to pieces.
For thousands, the losses are overwhelming. Some impossible to repair. One of my friends died, Sarai (ph) recalls, there are others we haven't found.
Rescue teams search for those still missing, even inside smashed cars where they hope to recover bodies. Cleanup crews work around the clock with heavy
machinery try and clear streets and reopen roads.
According to Mexico's government, at least 130 roads remain blocked. But amid the tragedy, solidarity rises. In Hidalgo, the state with the highest
number of people missing, Oscar Vasquez (ph) delivers food to his neighbors. People are very isolated. Food is running out, and getting it
through these roads has been really difficult.
Access has just been restored to the El Pantano community, situated between two hills left unstable by the rains. Authorities have begun assessing the
damage, having already inspected over 4000 homes, one of them belonging to the Hernandez family.
LEON: This house was completely destroyed following the intense rains across central Mexico, killing a woman inside, while the family was left
with nothing. But members of this community, located in the Mexican State of Hidalgo, now fear that new landslides coming from that cliff could bury
their homes.
LEON (voice-over): Danger still looming. Leti Hernandez (ph) mother of a newborn prepares to leave. He's only three months old. Of course, I'm
scared, she says. We can't handle it yourself. But when you have a baby, you think about them. In the middle of the emergency, it's mothers who
carry the heaviest burden.
Maria Angelina (ph) lives with her son, Fidel (ph), who has a disability. Honestly, it's scary, she says. It's never rained like this before. In
their small house covered with cardboard. Fidel (ph) can barely move on his own. This house is fragile, and since I can't walk, they couldn't get me
out of there.
The rains have left him afraid, haunted by the thought of being caught again, but this time unable to escape. Valeria Leon, CNN, Hidalgo, Mexico.
(END VIDEOTAPE)
MACFARLANE: Still ahead the from duties to depot, how car buyers are starting to feel the impact of Trump's tariffs on their wallets. And the
start of trading on, in New York.
[09:30:00]
We'll take a closer look at the numbers this hour and the swings we've been seeing lately, after the break.
(COMMERCIAL BREAK)
MACFARLANE: Welcome back. I'm Christina Macfarlane, and you are watching "Connect the World". We just saw the opening bell on Wall Street there. And
we're seeing a higher start to the trading day after a volatile session on Tuesday. You can see with all three indices in the green.
Earnings season continues, shares in bank of American Morgan Stanley both rising after they beat forecasts. However, fresh trade tensions between
U.S. and China continue to cast a shadow across the markets. More on that in a moment, but first, the head of the World Economic Forum says the root
of the tension between the U.S. and China is their understanding that the strongest countries are those with the greatest capabilities in an AI and
other new technologies.
Borge Brende spoke to Eleni Giokos in Dubai, where he is hosting the Global Future Councils and Cyber Security Summit.
(BEGIN VIDEO CLIP)
BORGE BRENDE, PRESIDENT & CEO OF WORLD ECONOMIC FORUM: The countries that want to come out of this decade as the strongest will be those that are on
top of the new technologies, being artificial intelligence and other frontier technologies. And that's where I think also the source of the
competition between the so called G2 U.S. and China is based on.
Both of these countries know that they need to really do well on the new technologies, have the most powerful chips and also be there now with the
new language models. What we've seen in the past is that those countries that do well economically also comes -- come out as the strongest
countries. So, there is a big competition out there, that's for sure. And the jury is out.
ELENI GIOKOS, CNN CORRESPONDENT: The jury is out. So, whoever does well economically and his economic strength is the one that's going to be the
winner. Essentially, in this -- Yeah.
BRENDE: -- look at the Soviet Union.
GIOKOS: Yeah.
BRENDE: That was forever until it was no more, and that was also based on not being able to succeed economically in the competition and the rivalry
with the U.S. at the time, because that during the Cold War, it was Soviet Union and the U.S. and U.S. did incredibly well economically.
[09:35:00]
It's 25 percent of the global economy and 5 percent of the global population. You know, that takes something to beat that one.
(END VIDEO CLIP)
MACFARLANE: Well, from the market outlook for the world economy to how these global trends are impacting families in their pockets. For the first
time, the average cost of a new car in the U.S. has topped $50,000 that is in part down to tariffs, with experts warning of an even bigger hit on
prices next year.
Matt Egan is here to explain what we're seeing and how tariffs may drive up international prices too. Joining us from New York, I would not want to be
in the market for a new car today. Matt, how much are tariffs to blame for this price hike then?
MATT EGAN, CNN SENIOR REPORTER: Yeah, Christina, look, if you are in the market for a new car, you do have to mentally prepare yourself for some
sticker shock, because yes, prices are high. They've never been higher. And you're right, tariffs are one of the factors here.
Now, Kelly Blue Book found that the average transaction price in September in the United States topped $50,000 for the first time ever. Now, prices
were up by about 4 percent from the same month last year. Now, 4 percent that's not a monster spike like the increases that we saw after COVID
during the supply chain crisis, but this is the biggest year over year increase in 2.5 years.
Now, I would just note that this is the average transaction price, so this is before incentives kick in, but still, $50,000 is obviously a lot of
money, and that's just the average, right? If you're looking at a full-size car, it's almost $60,000 a full-size pickup, $66,000 and a full-size SUV
now averaging $76,000, so why is this happening?
Well, yes, Kelly Blue Book says that tariffs are one of the factors that's driving up the cost to build a car, and it's not just the auto tariffs and
the auto parts tariffs. It's also the country specific tariffs, and then the tariffs on steel, aluminum, copper and other critical inputs. Now
another factor here is electric vehicles.
The federal tax credit in the United States went away at the end of September, so a lot of people were trying to beat the clock and buy an EV
before those tax credits went away, and Kelly Blue Book found that the EV share of the auto market in the United States hit an all-time high of
almost 12 percent in September.
But maybe the biggest factor here is who is buying cars and what cars are available right now, because those $20,000 affordable cars, they've kind of
gone extinct. Car makers, they're focused on the higher margin, more expensive cars and trucks. And right now, a lot of the cost-conscious
consumers, they've been priced out of the market right they're either not buying or they're focused on used cars.
And who is buying? It's the more affluent buyers who are, not surprisingly, buying the more expensive cars, and so that has lifted the average price of
a car. But Christina, this is just another reminder of the K shaped economy in the United States and in many parts around the world, where people have
money in the market who own their homes, they're doing pretty well, but lower income families, they're struggling, and many of them are not buying
cars right now.
MACFARLANE: Yeah, 50,000 is certainly not an achievable target, is it? Matt, we are also seeing some wider market volatility. There were some wild
swings on Wednesday. I mean, how much is tension with China to do with all of that.
EGAN: Yeah, Christina, that has been the reason why markets have been on a roller coaster the last few days. Taking a look at live markets right now,
you can see the DOW was up by about half a percentage point, around 250 points, bigger gains, though, for the S&P 3 quarters of a percentage point
and the NASDAQ is up almost 1 percent now.
U.S., China, trade tensions have certainly been the focus. We saw markets tumble on Friday, as these trade tensions reignited. Markets bounced back
on Monday, and then Tuesday, they were down again. They were kind of all over the place. It was a very up and down day, and then the president put
out this Truth Social post where he accused China of an economically hostile act by purposefully not buying soybeans from American farmers.
And the president threatened to retaliate by not buying cooking oil from China. So, this is another reminder of this ongoing tension between the
world's two biggest economies over trade. And there is still some worry that this could get worse before it gets better.
But I would just note that despite all of the trade tensions, despite all of the threats and the actual tariffs, you look at markets so far this
year, it's been a very good year, the DOW up by 9 percent the S&P, 13 percent and look at this, the NASDAQ, 17 percent higher so far this year,
and again, that's despite all of the trade tensions. Back to you.
MACFARLANE: Yeah. maybe we're just getting a little bit used to it. All --
EGAN: Well said.
MACFARLANE: Matt Egan in New York appreciate it. Thank you.
EGAN: Thanks.
MACFARLANE: And we'll be right back after this short break. Stay with us.
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[09:40:00]
MACFARLANE: After hosting the tournament in 2022 Qatar has secured a spot in next year's World Cup. Qatar's manager helped lead the celebration after
his team defeated the United Arab Emirates. Love that. Amanda Davies will have that in "World Sport" after this quick break.
And I'll be back at the top of the hour with more "Connect the World". Stay with us.
(COMMERCIAL BREAK)
[09:45:00]
(WORLD SPORT)
[10:00:00]
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