Return to Transcripts main page
Isa Soares Tonight
Fed Leaves Interest Rates Unchanged; Federal Reserve Keeps Key Rate Steady at About 3.6 Percent; Saudi Arabia Hosts Arab, Islamic Foreign Ministers; U.K. Lawmakers Question Whether King Should Visit U.S. Fed Chair to Announce Latest Rate Decision; Israel Kills Iranian Top Security Chief; U.S. Senators Question Intel Chief About Reasons for Iran War. Aired 2:00-3p ET
Aired March 18, 2026 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[14:00:00]
ISA SOARES, HOST, ISA SOARES TONIGHT: Hello, and a warm welcome, everyone, I'm Isa Soares. Tonight, we're going to get to the latest developments on
the war with Iran in just a moment. First, I do want to bring you some breaking news we're following this hour.
The Federal Reserve is announcing its latest interest rate decision. The Fed also revealing part of its summary of economic projections, which may
indicate the U.S. Central Bank's rate projections for 2026. We will expect to hear from Jerome Powell in about 30 minutes or so as well.
That's the most interesting part. We'll get a sense from him how the U.S. economy is doing. But of course, critical right now given the war in Iran,
given the shocks the system is going through with those oil prices that we have seen spiking.
It's been quite a roller coaster. Anna Cooban is here with me. Talk through the numbers, and I think stock markets are pricing in, and no change is
near zero chance. And now, we're hearing no change. Is that right?
ANNA COOBAN, CNN BUSINESS & ECONOMICS CORRESPONDENT: Yes, there's no change. So, Isa, this was expected.
SOARES: Yes --
COOBAN: We thought there wouldn't be a change, but the situation, the context is entirely different. So, everyone was looking about what the
impact of Trump's tariffs were going to be, the impact of his sort of trying to get -- you know, clamp down on immigration.
But within the space of a few days, the context is completely changed. And now, we're looking at this war with Iran and the potential for inflation to
tick up. So, I think there was an expectation that at some point this year, there will be a rate cut. And now some economists are saying --
SOARES: Not even, they're not October --
COOBAN: Not even later on in the year, because of the potential impact of those rising prices --
SOARES: Right --
COOBAN: Because of the feed-through for high energy prices.
SOARES: And as you're talking, keep an eye on the Dow Jones as we start the conversations. No change if you're just joining us on the breaking news
from the Fed, this of course will rattle President Trump.
Always putting pressure on Jerome Powell to actually keep rates low. But look, this Fed's balancing act, and that it will be interesting to see what
Jerome Powell says in what? Twenty -- 29 minutes, 28 minutes or so. The Fed's balancing act, Anna, is getting tougher because of what we are seeing
on the Strait of Hormuz.
As you been -- continue to report those price concerns and the fears of course, that, that may have the pressure they put on inflation.
COOBAN: Absolutely, and the Fed's dual mandate, Fed's dual mandate is to maintain maximum employment, but also to maintain price stability. And
we've seen a sort of softening of the labor market in the U.S. over the past few months.
Five out of the last nine months, there have been job losses which doesn't have much precedent in recent historical memory. And so, there are many
people saying, well, there's got to be a rate cut at some point this year.
Obviously, we've seen pressure from Donald Trump, whether or not that will have its own impact is a different question. But now people are saying that
we might see this feed through of higher energy prices to consumer prices, higher inflation. And actually, if you were to cut rates, that would be an
additional inflationary pressure --
SOARES: Yes --
COOBAN: At a time when the U.S. economy is staring down the barrel of potentially a resurgence in inflation. I mean, remember, a few years ago,
2022, we had over 9 percent --
SOARES: Yes --
COOBAN: Was the inflation rate. We're now down to around 2.4 percent in the last inflation measure, and that's near the 2 percent target, but you
know, what Trump has done in the space of a few days in starting this war has changed the game in terms of economic projections before the state --
SOARES: Indeed, and we're now third week now this war. I'm not ignoring. I'm looking actually now, and I'm not sure if you have it as well. The
statement from the Fed, talking about how job gains have remained low and employment rate has been little changed.
Inflation remains somewhat elevated, speaks to your point. But what I found interesting, and I'm just really looking at it very quickly, they talked
about exactly that. The implications of what's going on in the Middle East.
It says the implications of developments in the Middle East for the U.S. economy are uncertain. The committee is attentive to the risks to both
sides of its dual mandate. So, when we hear from Jerome Powell and what, you know, 27 minutes. What should we be looking out for here, Anna?
COOBAN: So, he's really going to be -- we want to be hearing about inflation. I mean, we've talked about that before. We really want to hear
about prices that people in America are going to be seeing on their shelves.
The way that this feeds through is that, you've got higher global oil prices. We're already seeing higher gasoline prices, the fuel that people
put in their cars, up around 32 percent over the past month.
[14:05:00]
Diesel prices are particularly interesting, Isa, that's the fuel that goes into a lot of trucks, a lot of businesses, business transportation. So, you
know, the fuel that's delivering your groceries from ports to shelves, that is now up over $5 a gallon.
And the first time it's hit that mark since around late 2022, when we had that early resurgence in inflation there. But yes, we want to hear from the
federal -- from Powell about what they expect to do around inflation, what they're seeing around jobs as well.
Remember, we're seeing here in this Fed statement that job gains have remained low, that's a key --
SOARES: Yes --
COOBAN: Priority --
SOARES: Yes --
COOBAN: For the Fed. So, how are they going to manage that balancing act is the big question.
SOARES: Anna, I really appreciate you being with us for this breaking news. I know you'll be back for when we hear from Jerome Powell. I find
that the questions and answers certainly the most interesting part to get an insight of how they see this moment, right?
With these inflationary pressures and given -- keeping an eye on the markets, given what has happened in the Strait of Hormuz. Anna Cooban,
thank you very much indeed. Well, was U.S. President Donald Trump telling the truth when he said Iran posed an imminent threat to the United States?
That is the major question U.S. senators posed today to the country's top Intelligence official. Director of National Intelligence Tulsi Gabbard, was
grilled by Democrats about Iran's nuclear capabilities. They tried to use her own Intelligence reports to contradict some of Mr. Trump's statements
about Iran. Have a listen.
(BEGIN VIDEO CLIP)
SEN. MARK WARNER (D-VA): Even in your printed testimony today, on page six in your last paragraph on page six, as a result of Operation Midnight
Hammer, Iran's nuclear enrichment program was obliterated.
There's been no efforts to try to rebuild their enrichment capability. You omitted that paragraph from your oral opening. Was that because the
President had said, there was an imminent threat two weeks?
TULSI GABBARD, DIRECTOR, NATIONAL INTELLIGENCE, UNITED STATES: No sir, I recognize that the time was running long, and I skipped through some of the
portions --
WARNER: So, you chose to --
GABBARD: Of my -- of my --
(CROSSTALK)
WARNER: You chose to -- you chose to take --
GABBARD: Of my oral delivered remarks, sir --
WARNER: You chose to omit the parts that contradict the President.
(END VIDEO CLIP)
SOARES: Well, let's get more on this. Go to Capitol Hill and CNN's chief congressional correspondent, Manu Raju. Manu, good to see you.
Look, we played one clip there, but we heard many senators, mostly Democrats and some independents trying to get some clarity really from not
Tulsi -- not only Tulsi Gabbard, from the -- from the Trump's Intelligence team asked to one, the reasoning for this war, the nuclear threat from Iran
and the preparation, which I found really interesting around the Strait of Hormuz.
Talk us through what we heard or whether any clarity really was shared here.
MANU RAJU, CNN CONGRESSIONAL CORRESPONDENT: Yes, the reason why that Tulsi Gabbard got so much attention is that she had been a long-time skeptic of
going into Iran before she joined the Trump administration.
And since we have seen the U.S. attack against Iran, there has been very little that has been said publicly by the director of National
Intelligence. And when she was pressed time and time again about whether or not there was an imminent threat to the United States, she kept side-
stepping that question.
Saying it was up to the President to make the determination about whether there was an imminent threat, not the Intelligence community and not the
director of National Intelligence. And that generated significant blowback by the Democrats on the committee who continued to press her on
that topic.
And in the immediate aftermath of the hearing, I asked the top Democrat on the committee, Mark Warner, about her decision not to assert that this was
an imminent threat.
(BEGIN VIDEO CLIP)
RAJU: What is your -- what is your takeaway from her for not saying this is an imminent threat? I mean, she was asked this repeatedly, what do you
draw from that?
WARNER: I draw that the -- I draw the same conclusion I've made since day one of this war. This was a war of choice. There was no imminent threat.
Now, the Iranian regime was awful. The unfortunate thing, it is still awful.
And I'm -- if anything, we've ended up with a worse and more repressive leader right now. And again, with -- I don't see any of the four goals the
President laid out of regime change, getting hold of the enriched uranium, eliminating all of the ballistic missile capability and drone capability.
(END VIDEO CLIP)
RAJU: And Gabbard was asked repeatedly by Democrats about whether she had briefed the President about the potential that the Strait of Hormuz could
be closed down by the Iranians if the United States went and attacked Iran.
She would not say precisely. In fact, she repeatedly said that she would not get into a private discussion about the briefings that happened before
or after the war began. So, a lot of concern and criticism from Democrats in particular, given that there has yet to be a public hearing for about
the Iran war, that administration officials have testified about.
This is the first time we've heard from some of these officials in what is known as the annual worldwide threats hearing, but the opportunity, the
effort by the Democrats to try to get some answers and shed some light about the preparations that went into the war.
[14:10:00]
They said they were not able to get those answers because of what they considered evasiveness by the top Trump administration officials. Isa --
SOARES: Manu, appreciate it. Thank you. Good to see you, Manu.
RAJU: Thank you.
SOARES: Well, Iran's President is calling the assassinations of his country's leaders cowardly. That's among the latest developments in the
war. Israel says it has killed Iran's Intelligence Minister, that's a day after it assassinated two other top Iranian officials.
The IDF says Esmaeil Khatib died in an airstrike. There were massive crowds in Tehran meanwhile, today, for the funeral of Ali Larijani, one of those
officials killed in an earlier Israeli airstrike. Larijani was Iran's security chief and a key voice of the regime.
And while NATO allies may have rebuffed U.S. President Donald Trump's call to join the operation against Iran, they are talking about how to help
reopen the Strait of Hormuz. Secretary-General Mark Rutte told reporters today, he's spoken with a number of members -- a number of countries about
that critical waterway. Have a listen.
(BEGIN VIDEO CLIP)
MARK RUTTE, SECRETARY-GENERAL, NATO: When it comes to the Strait of Hormuz, I have been in contact with many allies, we all agree, of course,
the Strait has to open up again. And what I know is that allies are working together, discussing how to do that. What is the best way to do it? They're
working on that collectively to find a way forward.
(END VIDEO CLIP)
SOARES: Well, let's get more. Kevin Liptak is at the White House for us, Jeremy Diamond is in Tel Aviv. Kevin, let me go to you first, because
President Trump is in Delaware, expected to pay tribute, of course, to six U.S. service members killed in Iraq last week in what I believe was a
refueling crash. Just remind us of how that happened and how they're being remembered today.
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Right, and the circumstances of this crash are not explicitly clear. Central Command has
not said precisely how this KC 135 refueling tanker went down. It was involved in an incident with another aircraft of the same type.
They said that it was not a result of either hostile or friendly fire, it went down in friendly territory, but beyond that, they have not specified
what exactly happened.
But it did result in the death of those six American airmen who are now returning to the United States for this dignified transfer that the
President is attending up in Delaware. These are very somber ceremonies.
You know, having covered a few of them with Presidents in the past, they are reflective moments, I think. And I think for a commander-in-chief, you
know, there's no other moment that I think instills on them the weight of the job, the weight of responsibility that they carry as they put troops in
harm's way.
And that, I think, has taken a toll on President Trump in the past. Certainly, I've talked to him about it after these ceremonies, and he has
been affected by them. This is the second one that he has attended since the start of the Iran conflict.
He was at Dover just a week and a half ago, about to observe the return of the remains of seven additional American service members. The American
death toll in this conflict now standing at 13. The six who are coming back today, three of them were based out of MacDill Airbase down in Florida.
Three others were based at an airbase in Ohio. All of them, of course, leaving behind families, parents, spouses, and in some cases, children. So,
certainly, I think a very heavy moment for the President.
You know, he said after attending that last one, that he did not expect that it would be the last time that he was at Dover Air Force base. He said
that he hates to do it, but that it's part of war, sort of acknowledging that the human toll of these conflicts is very heavy, but also that it
would continue on.
And I think that's a fact that will be weighing on his mind as he considers and debates in his own head whether to send American ground troops into
Iran. He has not ruled that out.
And we know that among the options in front of him are, for example, sending troops to Kharg Island to try and reclaim that critical area, or
sending troops to try and get back the nuclear material that remains buried underground at the Isfahan nuclear site.
Those are all decisions that the President will have to make. And I think attending this dignified transfer today only makes that decision even
weightier as the President considers these very risky missions going forward.
SOARES: Absolutely, it must be one of the hardest moments as commander-in- chief, of course. Let me turn to Jeremy, and Jeremy, just, you know, focus on Iran here. What more can you tell us about Israel's strikes in Iran?
They're continuing and more detail who they've been targeting. Jeremy.
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, Israel's assassination spree is certainly still continuing, killing yet another senior Iranian
official overnight. This time, it is the Intelligence Minister of Iran.
[14:15:00]
That news coming the same day that Iranians buried Ali Larijani; that senior security official in Iran, who by many was considered the de facto
leader of the country. And of course, before that, we saw dozens of other senior Iranian officials, including of course, the supreme leader,
Ayatollah Ali Khamenei in those opening waves of strikes.
And the Israeli Defense Minister, Israel Katz, says -- as he was confirming this, he promised that there would be more surprises from the Israeli
military. And he also said that the Israeli Prime Minister has authorized the Israeli military to streamline the process of targeting these senior
Iranian officials effectively.
You know, not needing certain approvals when an Intelligence and operational opportunity presents itself. But what we've also seen today are
Israeli strikes on Iranian oil and natural gas facilities. That's according to the Iranians and Israeli sources, although Israel hasn't yet publicly
and officially confirmed that it carried out these strikes.
They appear to be the most significant strikes on Iran's energy infrastructure since the beginning of this war. It's not the first time, of
course, we saw Israel carry out those strikes on fuel depots outside of the Iranian capital that made the sky black.
It made it rain oil basically, and so, Israel is clearly showing that it is still willing to continue targeting those types of targets despite the
blowback that it faced for those initial strikes on those fuel depots near Tehran.
And it's already getting some pushback, including from Qatar, which shared one of these offshore oil facilities with Iran, and said in a statement
that this is a, quote, "dangerous and irresponsible step by the Israelis".
The Americans for their part, are saying that this was an Israeli strike, not an American one, but that they were aware of the fact that these
strikes were being conducted. Isa?
SOARES: Jeremy and Kevin in the White House, thank you to you both. And still to come tonight, whose job is it to determine what's an imminent
threat to the United States? A stunning answer from America's top Intelligence official. That's next.
(COMMERCIAL BREAK)
SOARES: Well, returning to one of our top stories, top U.S. officials testifying in Washington today, taking questions from the Senate
Intelligence Committee about worldwide threats. The panel included the Director of National Intelligence, Tulsi Gabbard and the heads of the FBI
as well as the CIA.
[14:20:00]
In one exchange with the senator, Gabbard said it's not her job to determine what is -- what is an imminent threat. The only person who can,
she testified, is the President. The Trump administration has argued that Iran posed an imminent nuclear threat to the U.S. that required military
action.
Let me bring in CNN military analyst, retired Air Force Colonel Cedric Leighton, a well-known face on the show. Colonel, great to see you. And
this was one of the questions, I think, that was posed to Tulsi Gabbard time and time again.
They were trying to square this line from -- I think it was from July -- June of last year that the United States had said they obliterated, right?
The nuclear threat, and why the U.S. went after it again. And she kind of answered that this was a presidential prerogative.
I want to -- I want to run that clip, and we can discuss afterwards. Have a -- have a listen.
(BEGIN VIDEO CLIP)
SEN. JON OSSOFF (D-GA): Was it the assessment of the Intelligence community that there was a, quote, "imminent nuclear threat posed by the
Iranian regime?" Yes, or no?
GABBARD: Senator, the only person who can determine what is and is not an imminent threat is the President --
OSSOFF: False, this is the worldwide --
GABBARD: And he made that determination --
OSSOFF: This is the worldwide threats hearing where you present to Congress, national Intelligence, timely objective and independent of
political considerations.
(END VIDEO CLIP)
SOARES: What did you make of her answer? And is it just the President? Is it the President's prerogative only or it falls on the Intelligence also?
CEDRIC LEIGHTON, CNN MILITARY ANALYST: Well, Isa, it is not just the President's prerogative. He can make decisions, obviously, as commander-in-
chief, what he chooses to believe and what he, you know, wants to do in terms of actual military action or he can even help steer Intelligence
collection.
But the determination of the threat, and I say this as a former Intelligence professional, is absolutely in the hands of the director of
National Intelligence. And -- oh by the way, the directors of the subordinate Intelligence agencies like the CIA, NSA, DIA, and other
agencies that have that role to play.
So, yes, the Intelligence community and the director of National Intelligence in the United States, they are responsible, and she is, as a
person responsible for not only assessing the threat, but categorizing the severity of the threat.
SOARES: And I listened to the entire -- to the entire thing, colonel. And at the end of it, I wasn't -- I -- it wasn't clear to me whether the
Intelligence was provided to the commander-in-chief, and then he made his own decision, or whether the Intelligence wasn't provided. What did you
take away -- just kind of reading between the lines there?
LEIGHTON: Well, she was sort of invoking executive privilege. The idea that conversations between her and the President would remain private.
However, in this particular situation that, you know, reading further into this is, there's a distinct possibility that based on how Director Gabbard
answered the question, there's a distinct possibility that in this particular case, they never told him what the nature of the threat actually
was, or if they did, they let their ideology take over and blind them to the actual realities on the ground.
SOARES: Let's focus then on Iran, because I wonder how whether we have a sense or you, whether you have a sense, colonel, of how much of Iran's
capabilities still stand.
Because Tulsi Gabbard said on Capitol Hill that the Iranian regime, and I'm going to quote her, "appears to be intact but largely degraded due to
attacks on its leadership and military capabilities." But we have seen -- we have seen, we continue to see Iran retaliating. How do you assess Iran's
capabilities right now?
LEIGHTON: Well, I think we're -- you know, as you know, the U.S. in particular, but other countries also have the -- this problem of assessing
these things in the right categories.
So, when you look at this from an Intelligence perspective, what you really have to do is figure out what they have, what in this case, the Iranians
have, and in terms of how they can respond either militarily or otherwise to the kinds of actions that we're conducting.
So, the answer is, you know, the correct answer I think in the case of Iran is this, number one, their Air Force, their Navy and a lot of their anti-
aircraft and missile aspects of their -- of their power structure have actually been decimated to a large degree.
But, and here's the key thing. They have a lot of asymmetric capabilities. They continue to have missile-launch facilities. They continue to have the
ability to use small boats to place mines potentially in the Persian Gulf.
They have not done so completely yet, but they could certainly do so if they chose to. And so, the real answer from that perspective is that, the
Iranians are using other means to achieve their goals, or to at least, preserve the regime.
And that is, I think, what we're seeing here. The -- you know, I wish the Intelligence community in the U.S. would be a bit more frank in its
discussions --
SOARES: Right --
[14:25:00]
LEIGHTON: Of these things. But that's really what's happening. And for political reasons, they -- you know, have used the term obliterated when
that was not true. They also have a situation where they have to use very special language in order not to offend the President.
And that presents its own problems as we've seen in other historical situations similar to this.
SOARES: But we've seen also in the last 24 hours, the U.S. -- Iran said the U.S. and Israel have hit Iran's energy production facilities today. I
think this would be the kind of first such attacks that we're seeing, colonel. Do these strikes give us any sort of indication about timeline of
this war?
LEIGHTON: Well, they are designed, I think, to shorten the war, Isa. And - - but you know, whether or not they're going to be effective in doing so is certainly an open question. But that would be one of the key things that
you would do if you were going to attack Iran and try to achieve, you know, certain goals and try to meet certain timelines.
In this situation, I would say that, you know, striking the energy infrastructure is definitely an economic target. And it not only impacts,
you know, the balance of payments and, you know, the kinds of things that Iran earns from its export of oil.
But it also, of course, has an impact on the civilian population. So, both military and civilian sectors are affected by, you know, targeting the
infrastructure, the energy infrastructure. And it may be a precursor to some kind of action against a facility like Kharg Island. But that of
course --
SOARES: Yes --
LEIGHTON: Remains to be seen.
SOARES: Cedric -- Colonel Cedric Leighton, always great to get your analysis. Good to see you, colonel. Thank you --
LEIGHTON: Good to see -- good to see you, too, Isa, thank you --
SOARES: Thank you. And still to come tonight, we'll bring you Fed Chair Jerome Powell's statement as we promised you live, following Central Bank's
decision to hold interest rates. And also keep an eye on the Dow Jones, it was lower the last time I looked. We'll have more after this.
(COMMERCIAL BREAK)
SOARES: Welcome back. Returning to the breaking news we brought you, if you remember, at the top of the hour. The U.S. Federal Reserve leaving
rates unchanged. We are waiting to hear from Federal Reserve Chair Jerome Powell, who's due to speak at any moment from Washington, D.C. I can tell
you as Fed Chair, he's always on time. So, we'll bring you that when we are expected to see him. I think I'm seeing him right now from the point of my
eye. That's him. Let's have a listen.
JEROME POWELL, U.S. FEDERAL RESERVE CHAIR: My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment
and stable prices for the benefit of the American people. The U.S. economy has been expanding at a solid pace. While job gains have remained low, the
unemployment rate has been little changed in recent months, and inflation remains somewhat elevated.
Today, the FOMC decided to leave our policy rate unchanged. We see the current stance of monetary policy as appropriate to promote progress toward
our maximum employment and 2 percent inflation goals. The implications of developments in the Middle East for the U.S. economy are uncertain. We will
remain attentive to risks to both sides of our dual mandate, and I'll have more to say about monetary policy after briefly reviewing economic
developments.
Available indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient, and business fixed
investment has continued to expand. In contrast, activity in the housing sector has remained weak. In our summary of economic projections, the
median participant projects that real GDP will rise 2.4 percent this year and 2.3 percent next year, somewhat stronger than projected in December.
In the labor market, the unemployment rate was 4.4 percent in February and has changed little since late last summer. Job gains have remained low. A
good part of the slowing in the pace of job growth over the past year reflects a decline in the growth of the labor force due to lower
immigration and labor force participation, though labor demand has clearly softened as well. Other indicators, including job openings, layoffs,
hiring, and nominal wage growth, generally show little change in recent months.
In our SEP, the median projection of the unemployment rate is 4.4 percent at the end of this year and edges down thereafter. Inflation has eased
significantly from its highs in mid-2022 but remains somewhat elevated relative to our 2 percent longer-run goal. Estimates based on the consumer
price index and other data indicate that total PCE prices rose 2.8 percent over the 12 months ending in February and that excluding the volatile food
and energy categories, core PCE prices rose 3.0 percent. These elevated readings largely reflect inflation in the goods sector, which has been
boosted by the effects of tariffs.
Near-term measures of inflation expectations have risen in recent weeks, likely reflecting the substantial rise in oil prices caused by the supply
disruptions in the Middle East. Most measures of longer-term expectations remain consistent with our 2 percent inflation goal. The median projection
in the SEP for total PCE inflation this year is 2.7 percent and 2.2 percent next year, a bit higher than projected in December.
Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. At today's
meeting, the Committee decided to maintain the target range for the federal funds rate at 3.5 percent to 3.75 percent. From last September through
December, we lowered our policy rate three-quarters of a percentage point, bringing it within a range of plausible estimates of neutral. This
normalization of our policy stance should continue to help stabilize the labor market while allowing inflation to resume its downward trend toward 2
percent.
But the implications of events in the Middle East for the U.S. economy are uncertain. In the near term, higher energy prices will push up overall
inflation, but it is too soon to know the scope and duration of the potential effects on the economy. We will continue to monitor the risks to
both sides of our mandate.
We are well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, the evolving
outlook, and the balance of risks. In our SEP, FOMC participants wrote down their individual assessments of an appropriate path of the federal funds
rate under what each participant judges to be the most likely scenario for the economy. The median participant projects that the appropriate level of
the federal funds rate will be 3.4 percent at the end of this year and 3.1 percent at the end of next year, unchanged from December.
[14:35:00]
As is always the case, these individual forecasts are subject to uncertainty, and they are not a committee plan or decision. Monetary policy
is not on a preset course and will make our decisions on a meeting-by- meeting basis.
To conclude, the Fed has been assigned two goals for monetary policy, maximum employment and stable prices. We remain committed to supporting
maximum employment, bringing inflation sustainably to our 2 percent goal, and keeping longer-term inflation expectations well anchored. Our success
in delivering on these goals matters to all Americans.
We at the Fed will continue to do our jobs with objectivity, integrity, and a deep commitment to serve the American people. Thank you, and I look
forward to your questions.
COLBY SMITH, NEW YORK TIMES: Thank you. Colby Smith of the New York Times. There's been some debate about whether the Fed should look through the
inflation that will come from higher oil prices stemming from the Middle East conflict. Is that the right approach at this juncture, and to what
extent does the fact that inflation has been above target for roughly five years now influence the committee's thinking around this?
POWELL: So, first, let me say we're well aware of the performance of inflation over the last few years and how a series of shocks have
interrupted progress that we've made over time, and that happened most recently with tariffs, and now there will be some effects on inflation
coming forward.
The thing that's really important that we see this year is progress on inflation through a reduction in goods inflation as the one-time effects on
prices of tariffs go through the system, go through the economy. That's the main thing we're looking for going into this exercise, and we need to be
seeing that to, you know, to sort of understand that we actually are making progress because on net we didn't make progress, and if you look at total
inflation -- sorry, total core inflation, it's about 3 percent, and some big chunk of that between a half and three quarters is actually tariff. So,
we're looking for progress on that.
The question of whether we look through the energy inflation doesn't really arise until we have kind of checked that box. It, of course, is kind of
standard learning that you look through energy shocks, but that's always been dependent on inflation expectations remaining well anchored, and I
think now it's also dependent on what you mentioned, which is that broader context of five years now of inflation above target.
We have to keep all of those things in mind, and the question of looking through when it does arise will be one to approach not lightly, but, you
know, in the context that you mentioned.
SMITH: And just on the SEP, can you help us make sense of why there is still a bias to cut from most officials this year despite the upward
revision to headline and core inflation and the essentially unchanged forecast for growth and unemployment? Just curious, kind of, what's the
genesis behind the need -- what's the need for the cut?
POWELL: Yes. So, you know, there are 19 people and so 19 reasons --
SOARES: You have been listening to Jerome Powell, the Fed chief, at the top of the hour 37 minutes ago left rates unchanged 3.75 percent. This is,
though, the reason we're listening closely is because this is the first meeting from the Fed since the U.S.-Israeli war against Iran. We're now
three weeks into this war. We have seen prices spiraling, the Strait of Hormuz almost closed, and the shockwaves that are sent not just to stock
markets but oil markets, natural gas markets, and that's why it's important we listen to give us a sense of the impact on inflation.
Anna Cooban was listening in to that as well. It was interesting that you talked about supply disruptions in the Middle East and named that --
mentioned that a couple of times, but he wouldn't give us an idea of -- kind of, the knock-on effect just yet because he said the scope or duration
on the overall economy kind of gives us a sense it's too soon. What did you take away?
ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Yes. I'm actually slightly surprised at how, sort of, moderated he's been really about this.
Obviously, war that's broken out in the past few days, but really, there are slight revisions to some of the predictions that we saw in December.
The last time they looked at how the economic projections, but not by a huge amount.
So, inflation they're seeing is ticking up between 2.4 percent this year. That was December's projection, now 2.7 percent. Yes, that's fairly
significant. We just heard him then talk about how actually tariffs are a big bulk of that. The biggest chunk, apparently. Not the war and rising oil
prices. And then unemployment, the projection is 4.4 percent this year. That was the same in December.
So, I'm a little surprised at how, Isa, moderated they're being on this. But, you know, it needs to be said that the Fed does not know how this war
is going to play out. And so, things could change very quickly if this war is to escalate.
[14:40:00]
SOARES: Yes. The other question I remember when we had the Fed decision over the tariffs, it takes a while for it to actually -- for the data to
actually be seen, for the Fed to actually have that data. So, it's interesting that now we're talking about tariffs being the biggest chunk,
but no indication as of yet on the supply disruptions, which I thought he may -- he mentioned a couple of times, but I thought he would have given
some sort of inkling of what the concerns he may have, but he didn't go there.
COOBAN: No, not really. And I think, you know, it's not to say that history will repeat itself. We actually do not know how this is going to
play out. But the Fed was criticized back in 2021 for using this word transitory, transitory. They were criticized for being slow to hike rates
when inflation was ticking up, because they thought that all the factors that were pushing up inflation would subside.
Now, the reason why this is huge supply disruption right now is because of this war. It could, in theory, end tomorrow. But in theory, it could carry
on for a very long time. And it's also an enormous disruption. 20 percent of the world's oil is currently -- or thereabouts, is currently locked
away, cannot pass through the Strait of Hormuz. And we've seen some enormous increases in prices for consumers in America, which, if this is to
remain, you know, a sustained disruption, could really push up overall inflation.
SOARES: Yes, we're seeing WTI crude at 96, up almost 1 percent. But this is something you've been keeping an eye on. And just for clarification,
some vessels have been going through the Strait of Hormuz, right?
COOBAN: Yes, a few. And, you know, we've had reporting, an Iranian security source told CNN that Iran is talking with some countries to allow
for safe passage if the oil on their tankers are traded in Chinese yuan rather than U.S. dollars. Pakistani and Indian ships, some of them have
been allowed to go through as well. So, there is a trickle, but it's a trickle.
SOARES: Yes.
COOBAN: Yes, it is. The vast majority are not getting through.
SOARES: And the longer this goes on, the wider the implications, the wider the impact, of course, for the global economy. Jerome Powell, they talk
about uncertain risks, right? That risk remains uncertain. Thank you very much, Anna, for staying with us and talking us through this. Appreciate it.
We're going to take a short break. Be back after this.
(COMMERCIAL BREAK)
SOARES: Saudi Arabia is hosting a meeting of foreign minister from Arab and Islamic nations today. The aim is to discuss regional stability and
security in the context, of course, of the war in Iran. That is according to the Saudi foreign ministry.
And we are now just getting word of loud explosions in Riyadh, that's where we find our Nic Robertson. Nic, bring us up to date with the very latest
there, what are you seeing?
[14:45:00]
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes. I mean, Isa, I think it's also important to kind of mention here as well, this is the
first time that across the Gulf and from the region, foreign ministers have met in person. Leaders, foreign ministers have been having conference
calls, but this is the first time they've been brought together in Riyadh.
And this evening has been exceptional, not just because of their meeting, they are in this same building where we are. A few minutes ago, we were
hearing alarms going off, warning of some incoming missiles potentially, then explosions. And as I stepped out of the door here, I could see a large
piece of something crashing towards the ground, not clear if it was a missile or an intercept.
And I have to stress again, this is unusual in Riyadh. We haven't seen this in Riyadh since the war began. There have been drones that have been
intercepted. A couple of hours ago, sirens were going off again. The defense ministry said that four ballistic missiles were intercepted over
Riyadh, that debris had fallen on the city, but there was no structural damage, no injuries. We witnessed the interceptors taking off from the
center of the city, and we could hear the explosions of the intercepts or the missiles coming down, unclear.
Again, to stress, that is exceptional in Riyadh. So, to have these Iranian strikes with ballistic missiles on the capital, Riyadh, when the foreign
ministers from so many countries, I was talking with the Turkish foreign ministers, he was going in a few minutes ago, so many foreign ministers
here, it strikes us here as unusual that Iran would make the targeting here when this first high-level face-to-face meeting is happening, Isa.
SOARES: Yes, especially because the foreign ministers were all meeting there, and I understand as part of that meeting, trying to find some
commonality, being on the same page, of course, regarding this war, and I'm guessing also regarding the Strait of Hormuz.
What -- in terms of what you're hearing coming out of this meeting, what are you hearing from some of these foreign ministers, who now have had the
chance, like you said, to actually speak to each other face-to-face?
ROBERTSON: I think what we can expect to hear is unity. I think we can expect to hear how they're supporting each other. Of course, Saudi Arabia,
on its Red Sea port of Jeddah, is importing all the sorts of goods that would normally go by sea through the Strait of Hormuz and transporting them
by land to Gulf partners. We witnessed that at the border with Kuwait just yesterday. Hundreds and hundreds of trucks taking goods, food, medical
supplies, other equipment into Kuwait. So, I think we'll perhaps hear something about that.
But of course, what we've also heard from the GCC countries is a condemnation of Iran for its attacks, breaching international humanitarian
law. We've also heard them speaking about, you know, the cautious approach. When we get briefings, we're reminded that the countries here are taking a
very cautious approach, that they're not sure what President Trump is trying to achieve in Iran, and that they're very concerned about getting
dragged into a prolonged conflict.
Now, when it comes to the Strait of Hormuz, of course they have a vested interest in seeing that open, a heavy invested interest. Countries like
Saudi Arabia desperately need there to be peace, so that their economies can prosper and all the investment they want to make in their countries for
the future can happen. So, I think we may hear that sort of language coming out.
I don't think we're going to hear a change in position. Let's wait and see. This is the first time they've met face-to-face. But unity, for sure, and
how they're supporting each other will be key. And I think, obviously, the White House will be listening for any kind of language that would indicate
that they might join the United States. I would be surprised, at least from the briefings we've been having, that that would happen today. I don't
expect that.
SOARES: Yes. It will be interested to see whether these ballistic missiles that you were saying that prompted these interceptors, whether that changes
the calculus at all from their vantage point. Nic, so good to have you. Stay safe. Thank you very much. Nic Robertson, for us in Riyadh.
And still to come tonight, King Charles is expected to travel to U.S. next month, but some British politicians say he should reschedule. We'll speak
to our royal correspondent, our Max Foster, about this. That's next.
(COMMERCIAL BREAK)
[14:50:00]
SOARES: Well, there is growing concern in the U.K. over an expected trip by king Charles to U.S. next month. A member of parliament brought up the
possibility of U.S. President Donald Trump embarrassing the King in some fashion. This after Mr. Trump's critical comments about prime minister, if
you remember, Keir Starmer. Not just Keir Starmer's leadership and lack of support for the war in Iran, which we've heard numerous times. The state
visit by the king has not yet been confirmed. However, he has been expected to visit Washington in April.
And Max Foster joins me now with more. And I'm starting to hear more of this. Should he? Shouldn't he? What is your sense? What are you hearing?
MAX FOSTER, CNN ROYAL CORRESPONDENT: Well, it hasn't been confirmed, number one, apart from Trump has said suggested it's happening soon, but
the palace haven't confirmed it's happening. They act on the advice of the government. And Emily Thornberry, who's a backbench MP, but very sort of
senior MP, we'll agree on the government side in parliament, actually came out and said, perhaps it should be delayed.
So, the Liberal Democrats have already said this, but you'd expect it of them. But Emily Thornberry saying it was quite a moment. And what they're
trying to weigh up here -- so, the palace aren't involved in the decision to go, the government will say whether he should go. But will it be
embarrassing for the king if Trump lays into the U.K. against Starmer in particular?
SOARES: In an open setting --
FOSTER: Yes.
SOARES: -- like for Zelenskyy.
FOSTER: But they've got to weigh that off the fact that they're effectively going to be snubbing him. It might be seen as a snub to Trump.
SOARES: Right, exactly.
FOSTER: And the whole diplomatic strategy with Trump has been to indulge him and to flatter him. And he wants the king to go over for what is an
anniversary year for independence.
SOARES: He always seems to be in his best behavior around the royal family, doesn't he? Does he not? I remember the last time he was here for
the state visit, he didn't even tweet when there was Twitter at the time, it was called Twitter at the time. He was on his best behavior. So, do you
think, I suppose he's so unpredictable, that's the other aspect of this, isn't it?
FOSTER: Yes. Because the king won't be able to speak for the government. I mean, by law, he can't. So, if he starts bringing up how the U.K. didn't
stick up for America in this moment of need --
SOARES: Or not being Churchill.
FOSTER: -- he can't answer it, and it could be embarrassing. But at the same time, they're going to have to weigh off the cost of that. So,
diplomats are saying the only way really out of this is for both sides to decide on a delay.
So, ultimately, it ends up in the Oval Office, and whether or not Trump would agree to that, if he insists that Charles should come, it could
really deepen the rift, which is massively -- you know, this huge chasm that's developed over the last couple of weeks with the U.K. But the one
thing that really appealed to Trump about the U.K. was the royal family.
Can he, you know, talk about -- you know, what the king would want to talk about is the long-term relationship and, you know, relationship between the
countries away from the politics, would Trump also be able to stick to that? But, you know, this isn't a question for the king, it's a question
for the prime minister.
[14:55:00]
But it's a really big question because as soon as he gives approval for this visit, it all goes over to the palace and it's the king's problem.
SOARES: Yes. And what we have been seeing or hearing from President Trump is continued attacks on Prime Minister Starmer.
FOSTER: Yes. So, initially, it was that he didn't immediately offer help, Starmer, because he said he didn't believe in the war.
SOARES: Yes.
FOSTER: Then he did offer help because he saw British interests being threatened in the region and then it all happened again with this Trump
wanted warships to go to the Strait of Hormuz and Starmer, he hasn't said he won't, but he hasn't said he will.
SOARES: Yes.
FOSTER: And Trump's saying he doesn't need the boats anymore. But, you know, we -- the U.K. was Britain's closest ally and it's currently not.
SOARES: Max, we'll find out what decision has been made, preferably President Trump would make it be less awkward, wouldn't it?
FOSTER: And also, you know, this is meant to be happening at the end of April and, you know, the palace has got to organize a whole trip.
SOARES: Yes.
FOSTER: And they don't have that information yet. So, it's really tough for them.
SOARES: I'm running out of time, because I'm eating up to your show -- into your show and we don't want that. Max Foster's up next.
(COMMERCIAL BREAK)
[15:00:00]
END
