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First Move with Julia Chatterley
Putin Calls up 300,000 Reservists, Threatens Nuclear Escalation; Death of Woman in Police Custody Sparks Major Unrest; Fortescue Metals Announces $6.2B Investment in Green Energy; Markets Open as Investors Anticipate Fed Rate Decision; Putin Orders Partial Mobilization as Army is Pushed Back; Hong Kong's Population Falling as Exodus Accelerates. Aired 9- 10a ET
Aired September 21, 2022 - 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)
ZAIN ASHER, CNNI HOST: Coming to live from New York. I'm Zain Asher into my colleague Julia Chatterley, welcome to "First Move".
Let's take a look and see how U.S. stock futures are doing right now slightly higher actually ahead of the Federal Reserve's decision that we're
expecting later today. Central Bank is expected to raise interest rates by at least 75 basis points for the third time in a row Fed chair, Jerome
Powell will deliver his remarks roughly around 2 o'clock local time here all eyes on that.
Asian markets closed in the red Tokyo and Hong Kong down to more than 1 percent here in New York. President Joe Biden is set to speak at the U.N.
General Assembly in about 90 minutes from now. But all of this threatens to be overshadowed by the threatening language from Russia's President
Vladimir Putin as another 300,000 Russian reservists are being called up to fight in Ukraine.
It is the biggest escalation of aggression from Moscow today. This week, Russian occupied regions of Ukraine announced referendums on formally
joining Russia votes that have been dismissed in the West as shams. In a speech to the nation littered with false claims. By the way, Mr. Putin
spoke about nuclear weapons in stark terms.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, PRESIDENT OF RUSSIA: 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. And those who tried to blackmail us with nuclear weapons should know that the prevailing winds can turn in
their direction.
(END VIDEO CLIP)
ASHER: President Putin's address comes as Russia troops retreat from occupied territory Ben Wedeman is in Kharkiv, in the North Eastern part of
Ukraine. So Ben, just walk us through what has been the Ukrainian reaction to Putin's speech keeps me basically saying that Putin has launched the
process that will bury him in his country.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, by and large, the Ukrainian reaction has been dismissive, despite some of the alarming parts
of what we heard the President Putin say, we're talking about it, at least we heard the Defense Minister Sergei Shoigu, are talking about deploying
300,000 troops. Now, this is going to take a bit of time to train, to equip, and then to actually send them in the direction of Ukraine. So the
threat is not immediate, but it certainly changes the tone.
But as I said, the Ukrainians by and large, have considered it almost a joke, what the President said. And have been largely dismissive, we shall
see if that attitude continues, as this actually begins to come into effect on the ground, Zain.
ASHER: So it's obvious that Putin has failed in his initial objectives when it comes to Ukraine. So that's why he's escalating. How does Ukraine
respond militarily to this partial mobilization?
WEDEMAN: Well, first of all, as I said, the mobilization and the actual arrival of fresh troops on the ground in Ukraine is going to take months.
So how does it react?
Well, it's going to have to continue to request from its Western backers, more weapons, more sophisticated weapons, and that's what they've been
doing all along. But, you know, keep in mind, Zain that winter is coming once the ground freezes and temperatures really drop. Neither side is
really going to be in a position to make dramatic moves.
Now, the Russians in other parts of Ukraine, as opposed to the Kharkiv region where they really have lost a lot of ground are fairly well dug in
particularly in the Kherson area in the Southern part of the country where Ukraine has been pursuing a counter offensive gaining some ground. But
nothing compared to what has been seen here in the Kharkiv region.
So really, it's a waiting game really, if the Ukrainians can gain more territory before winter really hits then that will establish new lines that
will probably be the next battle lines when these new troops if and when they are deployed, hit the ground, Zain.
ASHER: Ben Wedeman live for us there, thank you so much. I want to turn now to Senior International Correspondent Matthew Chance. Matthew, so Vladimir
Putin described a partial mobilization not a full one.
[09:05:00]
ASHER: Just explain to us in detail what that means in practical terms. And also what's been the reaction within Russia to his speech?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I mean, the partial mobilization is a kind of halfway house, he hasn't gone for a full
on conscription of every adult male in the country. But he says that it's limited at the moment to people who served in the military and stayed on
the reserves, people who have special skills certified by the military that could have been used to the special military operation.
And it's Defense Minister Sergei Shoigu, clarified in remarks afterwards, that was going to amount to about 300,000 people. So that's a substantial
number of sort of fighting age males in Russia.
And it will do enormous things in terms of bolstering the lack of manpower, the Russians have been suffering with over the past couple of months to try
and replace the forces that have been eroded or killed, I suppose, is the correct term in the fighting so far.
It's not going to do much to address the shortfall of weapons and ammunition, which has also been widely reported. In terms of the impact
inside Russia, of the partial mobilization while there's some evidence that it may start to actually mobilize support, you know, again, opposition to
the war.
In fact, they've already been sort of instances of a very small protests scattered around the country. Some people have spoken out on social media
saying, look, you know, I can understand why people wouldn't want to be called up; they've got wives and families and children, and who'd want to
leave them for the potential uncertainties of the conflict in Ukraine.
And I think that that touches on, you know, one of the big problems for Vladimir Putin, this is going to be deeply unpopular. So long as the images
or this idea of the special military operation stayed on the screens of people in Russia and didn't affect their daily lives.
They were prepared to kind of go along with it and support it. But as soon as it's brought back home to them, in this very real way, there's actually
see people who don't want to go to war being sent to the war zone, I think it could have serious blowback for the Kremlin and for Vladimir Putin
specifically.
ASHER: It's a big wake up call for people within Russia, as you mentioned, many people who don't want to go to war, this idea of partial mobilization,
though, what does it tell us about the failure of Putin strategies? So far, when it comes to this woman? It hasn't exactly panned out how he was hoping
it would?
CHANCE: No, it has, I mean, back in February 24, when this whole thing began. I mean, I think the expectation was that this was going to be over
in a couple of days or a couple of weeks, and that the Ukrainian state was going to basically capitulate that the government was going to be gone,
there was going to be a pro-government, pro Putin, pro Kremlin puppet regime installed in here. That hasn't happened at all.
It's been a remarkable story of resistance by the Ukrainian side, of course, backed very heavily with weapons from the United States and other
Western countries that have taken a massive and unexpected toll on the Russian Military if they went in to this thinking that was going to be a
sort of walk in the park. They've had that view, very much changed by the high levels of casualties. And the lack of progress they've made in terms
of their Military aims over the past 7 months, Zain.
ASHER: Right, Matthew Chance live for us there. Thank you so much.
U.S. President Joe Biden set to address the U.N. General Assembly in just over an hour from now. He's expected to urge world leaders to stand firm
with Ukraine in resisting Russia's invasion.
Richard Roth joins us live now. So Richard, especially in light of Putin's partial mobilization, comments, I mean, there's obviously several foreign
policy priorities for President Joe Biden, but the Ukraine war is largely going to be front and center of his speech.
RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: Yes, certainly after the Secretary General War and the country's the yesterday of a winter of
discontent, there's a whole host of problems that U.S. President Biden can certainly confront. And Putin's announcement of a partial mobilization in
Ukraine will give him further ammunition to condemn Russia for threatening the effect the very existence really the foundation of the United Nations.
The U.N. was set up really to stop countries from attacking others following World War II. The Ukraine President will speak by video
transmission later today; the General Assembly had to vote overriding Russian objections for that to be accomplished. Within this hour, the
President of Iran Mr. Raisi will also address the delegates. So a big day here at the U.N. with President Joe Biden speaking 7th in the order this
morning, I estimate that to be at least 2.5 hours away.
ASHER: And in terms of Zelenskyy speaking, as you mentioned, he's supposed to give a virtual address he's supposed to speak remotely.
[09:10:00]
ASHER: What sort of international appeal, especially when it comes to weapons and military equipment do we expect them to make given Russia's
partial mobilization announcement?
ROTH: Well, it almost seems in the last seven months that President Zelenskyy has spoken to every group except Boy Scouts troop 240 in Tulsa,
but he's been making the case.
And he's going to again call on the nations of the world to come to Ukraine's aid, weapons, weapons, weapons, money, money, money, as they
fight off the Russians. There's no doubt about it as we see countries starting to come in the U.N. exit and entrance here at the General
Assembly.
ASHER: All right Richard Roth, live for us there. Thank you so much.
All right, U.S. Investors are on edge waiting for the Federal Reserve's decision on interest rates in just a few hours. It is widely expected that
policymakers will hike rates by 75 basis points. This is the third big increase in a row and the fifth rate hike this year. The Federal Reserve of
course, is tasked with using these tools to help get a handle on decade's high inflation.
Let's bringing my friend, Rahel Solomon, who joins us live now? From probably next door, I think you're probably next door Rahel. So this is not
so much about what the Fed says or does rather, when it comes to how much they raise inflation or raise interest rates by this is much more about
what they say about the lay of the land what they say about the state of the U.S. economy?
RAHEL SOLOMON, CNN CORRESPONDENT: Totally Zain, good to be with you as always. Yes, also about the economic projections to your point where do
they see unemployment going by the end of this year, next year? Where do they see inflation going by the end of this year?
But this is the fifth meeting this year with this? This was the fifth rate hike this year, I should say. But this is the first time we're actually
getting a Federal Reserve meeting Zain since July. So economists have been waiting for this market watchers have been waiting for this.
Certainly financial journalists have been talking about this all year long. And this is sort of where we're coming from, right. I mean, March, we
started with very gradual, just 25 basis points, or one quarter of a percent. And we have grown ever since then, if in fact, we do see another
rate rise of three quarters of a percent or 75 basis points.
Well, Zain supporters of this more aggressive approach would say this is the Federal Reserve's showing that not only does it have the tools to fight
inflation in terms of higher interest rates, but it has the resolve to fight inflation in terms of actually committing to those higher interest
rate hikes. I want to show you however, where we're coming from, because although this would be the fifth rate hike of this year, we're coming from
practically zero.
So right now we're at about 2.5 percent. If we see this rate hike that we expect will be closer to three and a quarter percent. Today's announcement,
Zain perhaps the most pivotal this week, but it is an incredibly active week for Central Banks. I mean, between today and tomorrow, it's not just
here in the U.S. with the Federal Reserve.
We're also going to hear from central bankers in Brazil, we're going to hear from Indonesia, Switzerland, South Africa, and the Bank of England.
And just to take a step back, the last time saying that we have seen consecutive rate hikes of this magnitude, you'd have to go back about 40
years more than 40 years to the 1980s. You could argue that some people watching this right now weren't even born, and then perhaps you weren't
even born that insane. I certainly wasn't --.
ASHER: I was born in a very early part of the 1980s. But thank you for ageing me Rahel.
SOLOMON: You don't look a day over the 1990s for sure.
ASHER: So one of the biggest fears for a lot of people is the idea of recession. Some Americans think that the U.S. is actually already in
recession when it comes to mood in this country. What is the sort of key economic indicators that we're looking for, to sort of indicate whether or
not this country is headed in that direction?
SOLOMON: Yes, well, it's a great point, right? Because in terms of sentiment, people certainly feel that way, right? They feel pretty crummy
about the economy; I would argue that's probably because of the outsize impact of inflation with consumer inflation right now at 8.3 percent.
But if we're talking about a technical definition of a recession, well, then we're looking at things like the labor market, which is still strong,
we're at 3.7 percent unemployment, which did tick higher last month, but is still low. We're still seeing consumer spend that is slowing but they are
still spending.
Business investment is starting to slow so we haven't seen it quite yet in the data. You could argue we have seen two quarters of negative GDP
although that could be revised. So unlikely that this period right now will be technically called a recession from the group the business cycle dating
committee of the NBER.
But in terms of how Americans are feeling you're absolutely right sane people feel because of inflation for sure that things are pretty crummy
right now that we are in fact in a recession whether or not we are or not.
ASHER: Yes, people not feeling so good about the rising cost of living. All right, Rahel Solomon live for us there. Thank you so much.
Right, in Iran, at least five people have been killed by security forces, according to an independent monitoring group that says the violence
happened during protests over the death of a woman in police custody. 22- year old Mahsa Amini had been arrested by Iran's morality police.
[09:15:00]
ASHER: Last week accused of breaking strict hijab laws her death has also led to protests on a level not seen in years. Some women publicly burning
their headscarves Iran is promising a thorough investigation into Amini's death.
The country's President is set to speak at the U.N. any moment now he's not expected to address the current unrest. These are live pictures from the
U.N. of Nigeria's President Muhammadu Buhari speaking but we are expecting Iran's President to speak next.
Jomana Karadsheh is following the story from Istanbul so people are demanding an investigation into Mahsa Amini's death. They want also the
dismantling of the morality police as well how likely is that to be any accountability here at all Jomana?
JOMANA KARADSHEH, CNN CORRESPONDENT: You know, Zain the protests started late last week over the death of Mahsa Amini while in the custody of the
morality Police the circumstances surrounding her death still being disputed between the government and her family and human rights activists.
But what we are seeing right now Zain is that these protests have snowballed into much more than that. It did spark these protests. But now
you've got young men and women thousands on the streets across the country in dozens of cities from the Kurdish, North-Western part of the country to
the Capital to run to even more conservative cities like Mashhad, you have these remarkable, really incredible images that are being described by Iran
expertise unprecedented.
Something we have never seen on this scale before where you have women on the streets, defying the compulsory headscarf regulations in the country,
taking off their headscarves burning them calling for freedoms and chanting down with the dictator.
This is something we have not seen on this scale before and you've got the government cracking down on these protests by all accounts. We've heard
from human rights activists, eyewitnesses on the ground that they have used everything from water cannons to live bullets, according to one human
rights organization, as you mentioned, at least five protesters killed but that has not stopped these protesters.
Even today, we're seeing more and more reports more images of demonstrations taking place, you really have a generation now Zain that is
saying enough is enough, two decades of repression. They are calling into question the religious authority in the country.
They are, as you mentioned, questioning the very existence of the morality police. And you know, we've spoken to Iranian activists outside the country
who are watching this, and they feel that this could be the beginning of something in the country.
They're hanging on to this hope that this could be a new chapter for Iran, perhaps some change that might be coming, but we'll have to wait and see
what happens. You know, we've had reports from net blocks that monitor internet activity in the country. And they say that they have documented
restrictions on the internet over the past few days.
And we had the Minister of Communications in Iran saying that's not true. That hasn't happened. But he does say that because of the security
situation in the country, because of the debates that are ongoing in the country.
The security authorities, the security apparatus might turn to restricting the internet, perhaps an ominous sign of what is to come. So we're going to
have to wait and see what happens in the coming hours and days. But certainly Zain this is really not stopped these thousands of protesters
that have taken to the streets across the country.
ASHER: Yes, as you point out Mahsa Amini's death was the spark but it has ignited into something so much more people calling into question the very
existence of the morality Police that heavy handedness and the treatment of women overall Jomana Karadsheh live for us that thank you so much.
All right, straight ahead, a plan to fight climate change from a bastion of heavy industry. I speak to the Chairman of Fortescue metal about investing
billions to cut out fossil fuels that are next.
(COMMERCIAL BREAK)
[09:20:00]
ASHER: Hearing from Australian iron ore company Fortescue Metals Group which says it will decarbonize its iron ore operations by 2030 investing
$6.2 billion in green energy technology. The company says a majority of the money will be spent before between rather 2024 and 2028. Fortescue Chairman
Andrew Forrest says the energy landscape has seen dramatic changes over the past two years and change has accelerated since Russia invaded Ukraine.
Joining me live now is Andrew Forrest, Founder and Chairman of Fortescue Metals Group. Andrew, thank you so much for being with us. So you've
announced this $6.2 billion plan to essentially eliminate fossil fuels, carbon emissions from your operations by the end of the decade. I mean,
given that your company relies at the moment so heavily on diesel and gas, just explain to us how you plan on doing that.
ANDREW FORREST, FOUNDER & CHAIRMAN, FORTESCUE METALS GROUP: Yes, thank you Zain. Great opportunity to do that thank you! What I did first is to, went
to all my major operators, all these huge plants, which is you've correctly observed burning massive amount of diesel and gas, and said, look in 2026,
I'm coming up there, I'm literally going to switch off the gas supplies, switch off the oil levers.
And if you don't have answers to how we're going to have another form of energy, which is not going to destroy the world, then I'm going to leave
those switches off and, and they loved it, they loved the challenge. And they've come back with these extraordinary ideas, which are not breaking
technology.
It's nothing out of this world. It's just great common sense. And what it proves, using wind and solar, gravitational energy, pumped hydro, all of
these things already exist. Our huge heavy mining company can go fully post the fossil fuel era and if we can soak in everyone else.
ASHER: I mean this is hugely ambitious. Taking metal out of the ground obviously requires generally a lot of energy. What you're promising is so
bold, and to do this, by the end of the decade, is a lofty promise to say the least. Are you confident, are you truly confident, Andrew, that this
can be done by that timeframe?
FORREST: Zain, I'm truly confident. I'm confident that timeframe, I think we'll probably beat it in. We've asked the United Nations to come and audit
us step by step. They can track how we're decarbonizing first our trains, then our trucks and our fixed plant all over our terrestrial operations. We
will go fully post fossil fuel. Yes, we have to do things differently.
[09:25:00]
FORREST: But business as usual Zain is over unless you want to ignore the science unless you don't care about the world business as usual is over, we
all have to change Fortescue, stepping up of one of Australia's largest companies, one of the world's largest mining companies in saying, we can go
post fossil fuel. And we can do it comfortably within this decade.
ASHER: So you'll be relying on wind energy, solar energy, battery storage hydrogen, some people are skeptical about the use of hydrogen in this
particular way. Elon Musk - one such example. What do you say to the skeptics here?
FORREST: Oh, look, I've had skeptics all my life. And that's how we built Australia's top performing company by 200 percent. Over the last 20 years,
so I look, you're not going to do something new doing it the same way to the critics of green hydrogen.
Look, if you're locked into batteries, that's commercial model, I'd say be technology agnostic, you've got no reason to be not technology agnostic. We
all know that batteries are only as good as the coal or fossil fuel you put into the battery.
So it's kind of pretending you're going green, only green hydrogen will send you green, only solar and wind, gravitational energy. And of course,
things like pumped hydro. That's what sends you green. And we're just tapping into technologies, which we already have. We did by William's
advanced engineering we think probably the most advanced prototype battery manufacturer in the world. And we immediately set them the task not winning
formula E races around the world but winning the gravitational energy race to make all our trains go pollution free.
All our trucks go pollution free, add hydrogen into that you've got a terrifically efficient combination, when that hydrogen is made from the
freedom of the sun, the freedom of the wind, and that's where the world has to go. We have so much energy, and its complete rubbish that we can't
switch. Fortescue is proving we can.
ASHER: It's interesting because you believe that de-carbonization is actually going to benefit you quite significantly financially $800 million
or so a year? Just walk us through that and explain how you plan to reinvest that money each year?
FORREST: Yes, look, thank you, I think we're going to reward a shareholders reward our stakeholders, we're going to pay more tax, because we're going
to make a lot more profits. But over, this is how the numbers work.
And I just want to reach out to all my temperamental analysts who are worrying about that its $6.2 billion, bought a lot of capital, will it hurt
the dividend? Will it do this? Can I just say it's a fabulous investment?
We are here to run this company to make fabulous investments for you. We also think that going green, going beyond fossil fuel is mandatory. But you
can do it very profitably. Let me just quickly explain $6.2 billion we make as a one of investment, we then get at least $820 million U.S. back each
year.
That's a 14 percent rate of return on its own that's stepping well beyond Warren Buffett's miracle of 9 percent. Then if you take into account that
the fact we started saving money going green last year, we saved $70 million. This year, we'll save double that next year, double, double, will
save $3 billion between now and the end of this decade when we're spending the money to go green.
Now you take that 3 billion off the 6.2 billion, you've still got savings every year forever. $520 million, Zain. That's now internal rate of return
to all financial analysts. Please listen up 25 percent. Now anyone is going to say that too bad investment. Come and talk to me.
ASHER: All right, Andrew Forrest, live for us there. Thank you so much.
FORREST: Thank you, Zain.
ASHER: We appreciate you joining us. Right, it looks as though let's take a look. Now it looks as though the President of Iran Raisi is speaking now at
the U.N. all eyes on that country for two particular reasons.
Firstly, the protests happening right now in Iran over the death of a young woman who was in the custody of the morality police also the various
sticking points when it comes to the Iran nuclear deal our producers are going to be monitoring what President Raisi says we'll bring you that
information live as and when we have it. All right, much more news after the short break don't go away.
(COMMERCIAL BREAK)
[09:30:00]
ASHER: Welcome back to "First Move". U.S. stocks opening at slightly higher ahead of the federal decision on interest rates. The central bank is
expected to raise its key rate by three quarters of a point again today.
Meantime, defense stocks are in focus as Vladimir Putin escalates Ukraine war by ordering hundreds of thousands of Russians to be drafted into the
military. Let's get more now on how the markets are reacting ahead of the Feds rate decision.
Marc Stewart joins us live now, Mark, good to have you with us. So is there a feeling of the worst maybe still to come when it comes to the U.S. stock
market? Or is most of what's going to happen today when it comes to the interest rate hike already priced in here?
MARC STEWART, CNN CORRESPONDENT: Hi, there Zain, it's really good to see you. Yes, for the moment, the expected rate hike of three quarters of a
percent is built into the markets. And that's perhaps why we're not seeing any kind of dramatic dip or jolt, at least at this point in the day.
But it is still very early in the trading day. And what the Fed chair will say later will certainly matter. Look, the prospect of higher interest
rates, it's very difficult for us the prospect that we could be facing higher credit card bills, auto loans, mortgage payments, that's hard for us
to - stomach.
Perhaps later today, when this becomes official businesses may express some concern because higher interest rates also mean a higher cost of operating
on their end of things.
And then I think also as the trading day progresses, we cannot ignore this heightened tension that we are seeing in Ukraine in particular the energy
sector. It was just a few days ago that Treasury Secretary Janet Yellen expressed concern about higher gas prices, higher energy prices, depending
on what Europe does next in relation to Russian oil exports.
So there's a long list of things to watch for today, Zain, of course, though that key moment is when the Fed at least makes his public statement
during the two o'clock hour.
ASHER: Yes, and most people are expecting a 75 basis point increase. But there are a handful of economists that think that the Fed could go as high
as a four percentage point, just walk us through that.
STEWART: Right. It's a small group that is saying that. But I heard from two economists over recent days, who said that perhaps something as
dramatic as a full point, a full interest rate hike four basis point hike would one point hike would be that kind of jolt that perhaps the market
needs.
[09:35:00]
STEWART: Yet another economist said to me, there's no reason for shock and awe, let's make it more of a gradual more of a gradual climb as we have
seen so far. But in addition to just the numeric number that we get from the Fed, I think we're all very anxious, including Wall Street, about what
the Fed Chair will say, how does he view things currently? What is he concerned about in the future?
I mean, so often Wall Street turns to companies and their earnings reports, whether it be retail or transportation, to get a sense of how they are
feeling, this is no different than with the Fed Chair.
ASHER: Alright, Marc Stewart, thank you so much for giving us the lay of the land there. I just have to say we are very, very happy to have you here
at CNN, I believe this was your first appearance on CNN for us. We're so happy to have you. Thank you so much for that.
STEWART: Thanks, Zain.
ASHER: All right. Let's speak to somebody who knows exactly how the Federal Reserve thinks and operates. Robert Heller is a former Governor of the Fed.
He joins us live now.
Robert, thank you so much for being with us. So how much pain is the Federal Reserve willing to inflict on the U.S. economy in order to get
inflation down to where it needs to be?
ROBERT HELLER, FORMER FEDERAL RESERVE GOVERNOR: That's an excellent question. In the past, the Federal Reserve has shied away from inflicting
pain. And that is the problem at the present time because the Fed is way behind the curve.
We have instilled a simulative monetary policy, if you look at it in low interest rates, relatively low interest rates compared to the very high
inflation that we have at the present time. So the Fed has a long way to go until they really will get inflation under control.
ASHER: And if inflation isn't brought down quick enough, what are the economic consequences of that?
HELLER: Well, a lot of consequences. First of all, we certainly don't want to have a wage price spiral instigated in the United States that will
always result eventually, in economic turmoil.
It will result in a big recession and much bigger recession than you would get if you would have taken the steps early, tightening interest rates
early in the game. So the end game will be a lot worse.
Think about countries like Argentina, Greece in the past, Uruguay, they all had enormous inflation's and it never ends well.
ASHER: Most people right now are expecting that the Fed is going to raise interest rates by 75 basis points today. Do you think they should go higher
than that, given how stubborn inflation has been? There are some people it's a very small group of people. But there are some who believed that the
Fed could and should go as high as a full point here.
HELLER: Well, I certainly that camp that the Federal Reserve should raise rates a lot more, they should have done so in the past, and they should do
so in the future. Whether they will do so is a different question.
So I think they will only raise 75 basis points, because they want to be cautious. They don't want to upset the markets. There's an election coming
up. And you don't want to disturb the economy too much.
But the Fed really has to raise rates for quite a while to come more than they have done so in the past.
ASHER: The thing is that this is less about the actual rate hike and more about Paul's comments more about his assessment of how the U.S. economy is
doing and the health of the U.S. economy. That is what markets are going to really be responding to here.
HELLER: Well, they're waiting for the words of the chairman, to give a bit more guidance, but the Federal Reserve really should not be in the business
of providing guidance or forecasting what they themselves will do. They should just do it.
And the Paul Volker, that's what we did.
We just did it; we let the market deal with it. So preparing the markets and forecasting what you're going to do in the future, I don't think is a
very fruitful exercise for the Federal Reserve.
ASHER: Interesting. I mean, here's the thing. We obviously know that there was a lag time between, you know, raising interest rates and bringing
inflation down. But why has inflation in this particular instance, been so stubborn do you think?
HELLER: It was the last two years in 2020 and in 2021. We had 25 percent increases in the money supply each year. And that was an enormous monetary
stimulus, combined with the fiscal stimulus which was also given to the economy. And as a result we get the big inflation build up with the normal
lag of one year to 18 months.
[09:40:00]
HELLER: So that's what we're seeing at the present time. It's the result of the policy mistakes of the past that we have to live with at the present
time. And we have to change course drastically.
ASHER: All right, Robert Hiller live for us there. Thank you so much. We appreciate it. All right, still to come here after the break President
Biden's address to the UN threatens to be overshadowed by Russia's escalation on Ukraine, that's next.
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ASHER: Returning to our top story dramatic escalation by the Kremlin on Ukraine, Vladimir Putin is calling up an additional 300,000 reservists to
fight beginning immediately.
Russia has lost ground in Ukraine its forces giving up some of the territory they claimed. Early in the war Mr. Putin speech, which was
riddled by the way with false claims can attain an ominous pledge to use all means necessary to defend his country. Britain's Foreign Secretary says
it's an admission that his invasion is failing.
(BEGIN VIDEO CLIP)
JAMES CLEVERLY, UK FOREIGN SECRETARY: These are the actions of someone who is clearly not seeing the conflicts in Ukraine go the way he had hoped. We
knew and we have been working with our allies, including, of course, the United States of America that he had hoped to dominate Ukraine in a matter
of days.
We're now seeing months later, the Ukrainians are pushing the Russians back. And these are the actions of someone who knows this conflict is not
going well.
(END VIDEO CLIP)
ASHER: Mr. Putin's comments come against the backdrop rather of the UN General Assembly here in New York where New York rather where the war on
Ukraine will dominate.
President Biden is preparing to give his address; the Iranian President is speaking now. Joining me live now is CNN Military Analyst, Colonel Cedric
Leighton. Colonel, I want to get your thoughts on this announcement, this partial mobilization announcement of 300,000 reservists that Vladimir Putin
has called up to potentially fight.
COL. CEDRIC LEIGHTON (RETIRED), CNN MILITARY ANALYST: Well Zain, I think you know, Putin in some ways didn't have a choice because he had such a
high attrition rate, such a high casualty rate with the Russian forces that were arrayed against Ukraine from the start of this invasion back in
February of this year.
So, on the one hand you can see that from a pure military standpoint it was necessary for him to do something like this.
[09:45:00]
COL. LEIGHTON: On the other hand, though, you know, this is a clear escalation of the action as far as the Russians are concerned and the
impact on the Ukrainians will probably be felt a bit later.
The problem that Putin is going to have, though, I think, with this is that he's not going to be able to employ these forces immediately. They will
need training, they will need equipment, they will need training in the specific weapon systems that they need to use.
And they would be you know, having to supply these troops with these new weapons systems. So it's going to be tough for the Russians to do this. But
there are a lot of threats in Putin speech.
And those threats, of course, could go well beyond just placing these reservists or some of these reservists on the frontlines against Ukraine.
ASHER: Yes, there were several ominous moments in that speech. You talked about training needed, you talked about supplying them with equipment with
weaponry, actually transfer, bring them to the border with Ukraine, how long does all that take?
COL. LEIGHTON: It really depends on the specific weapons systems and where things are, you know, in terms of geography. So it could take up to a year
in some cases to do some of this. Certainly we're looking at, for most of these things to be moved into an area where they can be used, and the
people to be moved along with the equipment.
You're probably talking at a minimum, two to three months, more like six months before; a lot of this can be brought to bear on the front lines.
ASHER: And of course within six months, the dynamic of this war could shift dramatically. How does Ukraine respond militarily to this announcement?
COL. LEIGHTON: I think the best way for them to respond is to keep up their momentum as much as they possibly can. Of course, they rely on the west in
the NATO States as well as the United States, to bring them all the munitions that they need weapon systems that they need.
They can certainly benefit the Ukrainians can from additional types of weapons, such as potentially fixed wing aircraft, like fighter jets, you
know, something like that would be a bit of a game changer.
So, you know, in essence, coupling the tactics that they've been employing lately, with new, more aggressive weapon systems that could certainly help
the Ukrainians maintain the momentum that they have, and potentially allow them to continue to gain territory as they've been doing in the last few
weeks.
ASHER: Yes, because they've had this sort of surging counter offensive and they really need to keep that up. How hard is it to get an accurate picture
of the number of casualties, the real number of casualties that Russia has sustained on the battlefield?
COL. LEIGHTON: It's really hard to do that, Zain. I mean, for one thing, we're dependent on a word from the Ukrainian military in terms of the
number of Russians that they've encountered either as killed in action, wounded inaction, prisoners of war, those kinds of things.
And when you look at the Ukrainian estimates and some of the estimates from Great Britain and other NATO countries, we're looking at somewhere around
50 percent of the forces that we believed were arrayed against Ukraine in February in late February that they have in one way or another, lost their
combat effectiveness. That's a significantly high casualty rate.
But it's very difficult to get accurate numbers because of course; the Russians are being very silent about their casualty rates. They've only
sporadically released some data on these casualties. And they certainly don't want to release more data because of course, it could have a negative
impact politically at home for them.
ASHER: Yes, one thing's clear, though. When you hear Vladimir Putin talk about this partial mobilization, perhaps bringing 300,000 more reservists
to come and fight. It is very clear that this war is not ending anytime soon, at least no one has watched.
All right, Colonel Cedric Leighton live for us there. Thank you so much. Alright, still to come here is The Pearl of the Orient, losing some of its
luster, how a major brain drain is impacting Hong Kong.
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[09:50:00]
ASHER: A brain drain in Hong Kong is proving a major headache for the city as it reports its sharpest annual drop in population. COVID restrictions
and a political situation are being blamed for the Exodus. Kristie Lu Stout looks at how one of the world's biggest financial hubs is changing.
(BEGIN VIDEOTAPE)
KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): American couples Sarah Churgin and Steven Cody are fed up with the city. She's a vet. He's a
banker. And after eight years in Hong Kong, they're packing up for a one way trip back to the U.S.
SARAH CHURGIN, EXPERT LEAVING HONG KONG: The biggest thing for us has been the change in how often we can see our families. Usually I got to see them
anywhere between two and four times a year. Now we went two and a half years without seeing anybody.
STOUT (voice over): Sarah and Steven joined over 100,000 other residents abandoning the Chinese territory this year, unable to endure life in a city
that's become one of the most isolated in the world.
Mask mandates remain in effect here and as other countries live with COVID- 19 people have fled Hong Kong's heavy handed restrictions, and they've been leaving in droves.
STOUT (on camera): Hong Kong is bleeding talent at a record pace. Over the last year the financial hub long billed as Asia's world city has seen over
113,000 residents leave including expatriates and non-permanent residents.
STOUT (voice over): It's the city's sharpest annual drop in population on record since 1961. Authorities attribute part of the decline to a natural
decrease of reporting more deaths than births. Experts say Hong Kong's changing political landscape and strict zero COVID policy have prompted
many to leave.
LUCY JORDAN, PROFESSOR, UNIVERSITY OF HONG KONG: You're witnessing a historic departure, the result of the social unrest and the social movement
here in Hong Kong and then followed by COVID.
STOUT (voice over): The government has eased the hotel quarantine period from a peak of 21 days to three, and plans to host the international Rugby
Sevens in the global banking summit in November are seen as opportunities for Hong Kong to open up.
But Beijing's political crackdown in the territory has also contributed to the population decline. An offer of citizenship by the UK has attracted at
least 140,000 Hong Kongers to apply for the special British National Overseas or BNO visa.
Including Gavin Mok who moved to the UK last year with his wife and two daughters, a former stockbroker, he's now a delivery driver in Exeter, who
has no plans to return.
GAVIN MOK, BNO VISA HOLDER: I'm glad that I made that decision, freedom of speech, democracy, everything you can say whatever you like.
STOUT (voice over): Gavin misses the comforts of Hong Kong, but he relishes his freedom.
PAUL YIP, POPULATION HEALTH EXPERT, UNIVERSITY OF HONG KONG: In Hong Kong, the population is very volatile. I mean very fluid. It can - one way or the
other. It really depends on the development of Hong Kong or how the people perceive this place.
STOUT (voice over): 7.29 million people still call Hong Kong home, but not Sarah and Steven despite their many fond memories.
CHURGIN: In addition to COVID there have been a lot of political changes. The city has changed a lot since we both came eight years ago. And some of
that is not going to go back.
STOUT (voice over): Their boxes are sealed. Plane tickets booked even for the cats. Another family ready to leave the city they once loved. Kristie
Lu Stout CNN, Hong Kong.
(END VIDEOTAPE)
[09:55:00]
ASHER: Moments ago Iranian President Ebrahim Raisi addressed the UN General Assembly. And while he didn't directly address the protests happening in
this country right now over the death of a woman in police custody, he called out the West for what he said is a double standard.
(BEGIN VIDEO CLIP)
EBRAHIM RAISI, IRANIAN PRESIDENT: The Islamic Republic of Iran reject some of the double standards of some governments vis-.-vis human rights and sees
that as the most important factor which has rendered by now the topic of human rights in the eyes of many.
Because this is something that is currently taking place at this course that is taking place in the Islamic Republic of Iran, where we started
speaking of and creating a dialogue about the deaths of tens of innocent women in a Western country. So until we have these double standards where
attention is solely focused on one side and not all equally.
(END VIDEO CLIP)
ASHER: And that is it for the show. I'm Zain Asher. "Connect the World" is up next. You're watching CNN.
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