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Isa Soares Tonight

Ukraine: Passenger Train Hit by Russian Drone; Fed Announces Rate Hike; Worldwide Protests Over Soaring Fuel Prices; Opening Acts Quit Ed Sheeran Tour After Macklemore Dropped. Aired 2-3p ET

Aired September 16, 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: A very warm welcome to the show, everyone, I'm Isa Soares. We do begin with breaking news this hour. The

U.S. Federal Reserve is announcing its decision on interest rates. I want to go straight to our Richard Quest. I know, Richard, you're probably

poring --

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Yes, Isa --

SOARES: Through the numbers --

QUEST: Good evening --

SOARES: Good evening to you --

QUEST: Yes, I'm just waiting actually, to -- good evening. I'm just actually waiting to get a copy of the statement to see exactly what the Fed

has. And you may be able to see on your computer screen better than I can - - oh, here we go. Here we go. They have approved --

SOARES: Yes --

QUEST: The following -- that they decided to raise the target rate for the Fed funds by a quarter percentage point to 3.75 percent to 4 percent. So,

the U.S. Fed has raised U.S. interest rates. This is the first-time rates have been raised since July of 2023.

That cycle, that cycle was started a year previously. Now, what's interesting here is usually interest rate moves are not in isolation. So,

this begs the question whether or not a cycle of rate rises has now begun, whether it be 1, 2 or 3, we won't know, of course.

I'm just looking to see now. So, this is what the Fed is -- if you have time for me to say. This is what the Fed says. Economic activity is

expanding at a solid pace. Uncertainty, geopolitical domestic spending, inflation remains elevated, and today's policy will support a timelier

return to 2 percent.

You're seeing there, pictures of Kevin Warsh, the new -- relatively new Fed Chair. He was appointed by Donald Trump. Mr. Trump had -- President Trump

had hoped that Warsh was going to bring down rates.

Well, his first major move is in exactly the opposite direction. I guess the political fireworks will begin. But Kevin Warsh won't be deflected on

this. He was very clear after Jackson Hole, getting inflation down is his priority.

SOARES: Yes, I wonder whether the honeymoon that we've heard so much from President Trump, Richard, and Kevin Warsh, whether that is over. But look,

the way --

QUEST: Well --

SOARES: They voted on him, I'll just put my glasses on, you know, my eye sight is terrible. Twelve to nil --

QUEST: Oh, yes --

SOARES: Right?

QUEST: I think I got the numbers --

SOARES: I think that was the vote. Is that right? Yes.

QUEST: Now that's significant.

SOARES: Yes, I think I've got it, hold on, I'm trying to get it --

QUEST: Yes, now that --

SOARES: Yes, speak to that.

QUEST: Now, that is really significant because there were a couple of -- if you look at the last few decisions, there were some in favor of raising

rates and the majority of course were in favor of keeping rates where they were.

This tells us that everybody is on board. There are no holdouts. There are no doves, you know, around the pillars of the Fed waiting to see what might

happen. No, Kevin Warsh has his entire FOMC behind him.

It's a strong message that basically says this is necessary because inflation -- and for good cause, Isa. Inflate -- you know, the price of a

barrel of oil has gone back over a $100 a barrel because --

SOARES: Yes --

QUEST: Of the continuing war. Therefore, there was no reason or no coat -- there was no peg upon which he could hang his hat --

SOARES: Yes --

QUEST: And allow him not to move rates higher.

SOARES: And there's so much economic uncertainty around that war, Richard. And I'm guessing it's not just inflation or the only metric that is

squeezing Americans.

[14:05:00]

We've also -- and this is something I'm sure you've spoken about on your show. We've been talking about bond yields, really, and borrowing costs,

how that has increased. Speak to those concerns that you've been hearing from investors --

QUEST: Well --

SOARES: Economists on your show.

QUEST: Sure, so, the bond market is simply a reflection of what traders, the vigilantes, if you will, think the U.S. economy is doing and what

policy is doing. And what we've seen, of course, is they have been pushing long-term rates higher.

And now, of course, the Fed has pushed short-term rates higher. But what the -- what the markets are saying is, we don't like the fact that U.S.

debt is over $40 trillion. We don't like a budget deficit that is 6 percent.

We don't like economic policies that show no obvious sign of bringing down those numbers. I'm just trying to look to see on my screen, which I don't

have immediately in front of me, how the Dow -- I am sure you've got it, you can bring it up.

SOARES: Can we bring the -- yes --

QUEST: How the markets all react --

SOARES: Let me bring the Dow -- can we bring -- I'm going to ask Laura(ph), can you bring the Dow up for us. It was lower the last time --

QUEST: Here we are, yes --

SOARES: I looked Richard -- oh, flat, pretty flat at the moment --

QUEST: Yes --

SOARES: But --

QUEST: Well --

SOARES: We shall see, but we'll hear from Kevin Warsh in what? Yes.

QUEST: And just about 20 minutes -- 25 minutes. This -- the markets, they were expecting it, but yet, the stock markets are like children. You can

tell them again and again what's about to happen. But when it happens, they always look surprised -- as if, oh, you never told me that was going to

happen. And what you might say --

SOARES: I know what that's like. I know what that's like, but look, you're right. It was about what? Ninety percent priced in, right? Roughly 90

percent priced in. What would be interesting --

QUEST: Yes, absolutely --

SOARES: To see in about 25 minutes or so, is what Mike Warsh says in terms of going forward. Richard, thank you very much, Richard Quest, we'll have

much more, of course, on the show, "QUEST MEANS BUSINESS", really appreciate it, Richard, for breaking this news --

QUEST: Thank you --

SOARES: Down for us.

QUEST: Thank you --

SOARES: Well, Richard was talking about the cost and the pressure on inflation, given this oil prices. Well, the U.S. House is sending a strong

rebuke to President Donald Trump, calling on him once again to bring an end to the war with Iran.

Three new Republicans joined four others and Democrats in approving a war powers resolution that would stop military action without congressional

approval. It is not clear whether the Senate will take up the measure before the November Midterm elections.

President Trump has dismissed previous resolutions, calling them meaningless. Well, and a new CNN investigation reveals how Russian spy

satellites orbiting over the Persian Gulf likely helped Iran hit U.S. assets with devastating precision, injuring personnel and destroying key

resources such as AWACS, Washington eyes in the sky in the region. Our Tamara Qiblawi has this story.

(BEGIN VIDEOTAPE)

TAMARA QIBLAWI, CNN SENIOR INVESTIGATIONS REPORTER (voice-over): This is the launch of Cosmos-2573, one of Russia's elite spy satellites currently

collecting Intelligence across the globe. Now, CNN has learned that these satellites have likely given Iran a considerable advantage in its fight

against the U.S., capturing not just what U.S. military sites look like, but also exposing their inner workings.

Our sources, including two U.S. officials tell us they have evidence that those satellites are feeding some of that Intelligence back to Iran, aiding

at least some precision strikes. The apparent synergy between Russian satellites and Iran's rockets is laid bare here -- Prince Sultan Air Base.

UNIDENTIFIED FEMALE: Then we begin with the breaking news. Iran striking a U.S. base. Iranian state media releasing this image which shows a strike at

the Prince Sultan Air Base near Riyadh in Saudi Arabia.

QIBLAWI: A major Iranian attack on March 27th. The U.S. has had a strategic presence here for decades. According to our sources, Russian

satellites played a vital role in these strikes, which wreaked havoc on the base and injured 12 U.S. personnel.

Now, we do not have access to Russia's satellite images, but we looked at the orbital data tracking satellites and assessing their visibility over

sites of interest with help from space technology experts Project Aurora and Kayhan Space, who provided us with the images you see.

Here's the Cosmos-2573 again, just two days before the attack. It flies over the base along with 13 other Russian spy satellites. Our analysis

shows that these spacecrafts moved in both a perfect sequence and had a perfect view to collect rich, multisensory data.

Each of these satellites contributes a different part of the Intelligence picture. Cosmos-2573 captures deep and detailed military grade satellite

imagery. These eight are signal satellites. They can intercept radio and radar emissions, allowing them to locate air defenses that can shoot down

the incoming missiles.

[14:10:00]

These two are infrared satellites. They pick up heat signatures, the kind that comes from rocket launchers. And finally, three synthetic aperture

radar satellites, known as SAR. They're able to see through clouds and darkness and flag physical changes showing, for example, where a movable,

high value asset might be repositioned.

Like this plane, the Airborne Warning and Control System, AWACS for short, America's eyes in the skies in the Middle East.

Crucially, the AWACS was not parked in its pre-war location. On March 27th, Iran destroyed it. An aircraft worth hundreds of millions of dollars and

very difficult to replace. The scale of the damage to the base and the accuracy of the strikes would have been nearly impossible without Russian

geospatial Intelligence, according to our sources.

(On camera): And this isn't an isolated incident. Now, there is some debate among U.S. officials over just how consequential Russian support has

been. But our sources broadly suspect that Russian satellites gave Iran targeting information several more times over the course of the war,

including at a CIA facility in the Saudi capital.

NAWAF OBAID, SENIOR FELLOW, KING'S COLLEGE: We wouldn't be in this situation today. The war wouldn't be where it is today if it wasn't for

these unique capabilities that the Russians gave to the Iranians.

QIBLAWI (voice-over): According to experts like Dr. Nawaf Obaid, one of the reasons Russia has been helping Iran, Moscow calls this fake news, is

because the U.S. is working with Ukraine in a similar way through Intelligence sharing, to support strikes similar to these.

OBAID: You have to see it in this way. This is Russian payback with interest. It's monumental in terms of the consequences of what this has

done to not just to the U.S. standing in the region, but to the security architecture of the region going forward.

QIBLAWI: Tamara Qiblawi, CNN, London.

(END VIDEOTAPE)

SOARES: And thanks to Tamara for that report. Well, Saudi Arabia is accusing Yemen's Houthis of launching a drone attack targeting Mecca, a

move that has led to outrage in the Muslim world and is fueling fears of an even wider war spreading right across the region.

The Saudis say they intercepted and destroyed the drone before it entered the airspace of Islam's holiest city. The Iranian-backed group denies the

allegations. Recent Houthi attacks have the kingdom facing the prospect of being dragged into the broader conflict.

Well, I'm glad to have the expertise of Colin Clarke; the Executive Director of The Soufan Center, he's also the author of "After the

Caliphate: The Islamic State and the Future of the Terrorist Diaspora". Colin, great to have you back on the show.

Look, we have seen -- I feel like we've been talking about the Houthis almost every day on the show. We've seen how much they have advanced, how

quickly they're advancing, going after Mecca, going after Perim Island, really consolidating their grip on the international shipping route, right.

You studied them for a long time. What do you make of this advance?

COLIN CLARKE, EXECUTIVE DIRECTOR, THE SOUFAN CENTER: Thanks for having me back, Isa. In fact, I went back to check the last time we spoke, which was

a few weeks ago, I actually said, you know, the Houthis haven't really gotten involved fully yet.

That might be the ace up the Iranian sleeve. So, here we go. This is a very deliberate move strategically on the part of the Iranians to use this proxy

in this way at this time. This has been a phased approach since late February when the war kicked off.

And right now, this is hitting on a couple of levers. One, it's isolating the Saudis. It's putting pressure on energy markets, and it's showing the

world that the Houthis are not scared of anybody. They're meeting with administration officials from the United States in Oman on the sidelines to

basically say, we won't go after you if you don't go after us. This is largely unprecedented.

SOARES: Right, so, then I suspect the -- Colin, the question then becomes, what do they intend to do with their strengthened position? I know you were

saying, you know, they're seen as an ally of Iran, but are they doing this for money, political recognition. What do you know? What do we -- do you

know about them that kind of help shape the next steps?

CLARKE: Well, they see themselves and my colleague Elizabeth Kendall(ph) over in the U.K. spoke about this recently. They see themselves as the

victor in this kind of on-again, off-again Yemeni civil war. Their goal is to consolidate power, and that's their foremost objective, the byproduct of

that, it's going to benefit Tehran.

And so, the Iranians are going to use this as leverage as we go through this kind of fight and talk negotiation where we have kind of tit-for-tat

exchanges, the Iranians know that this is putting a lot of pressure on the United States.

It's putting pressure on, again, global commercial shipping markets, the global economy. And we're -- you know, slowly inching up toward the Midterm

elections in the United States. This is a really big problem for the Trump administration right now, even though they're attempting to say, you know,

this isn't our fight.

[14:15:00]

SOARES: Right, and even if Colin, I wonder if the Houthis think, believe that this is a controlled escalation in their part because they're only

targeting Saudi ships. How far then, do you think they're prepared to go here?

CLARKE: I think they're prepared to go all the way to seek to consolidate control over as much of Yemen as they possibly can. And if these reports

today about surface-to-air missile taking out a Saudi F-35 are true, which they appear to be, you know, that's another kind of level of escalation

here. That's a really big deal.

And I think we're only kind of gathering the facts on this now. But if you look at the capabilities of the Houthis to go after the East West Pipeline,

to take out, you know, really expensive aircraft and strike fighters, this is not just your average kind of terrorist or insurgent group. These guys

are like violent non-state actors on steroids.

SOARES: And they seem very organized. I mean, I'm not applauding them here, but just the level of organization and how quickly they're doing this

is pretty astounding. I suppose the question then, Colin, as we look ahead, you're saying they'll probably go all the way.

Where does this leave Saudi Arabia, as is then drawn in further into this? And where does this leave the United States here?

CLARKE: Yes, so, this has been a very deliberate, phased approach. They've been putting this strategy in motion for months, in fact. It leaves the

Saudis in a very precarious position. They're reaching out. They're actually quite desperate at the moment.

Reports are that, Crown Prince Mohammed bin Salman reached out to President Trump multiple times, was apparently rebuffed, reached out to other

countries in the so-called Mecca Alliance, Pakistan, Turkey, no help coming there.

So, the Saudis, I think, look pretty terrible on the world stage here. And, you know, for the United States, this is just further proof that this ill-

planned war is not going according to plan. And something that was supposed to last a mere matter of weeks has dragged on for months and is putting

this administration in the crosshairs of some of Iran's most potent proxies.

I would say right now, even more so than Lebanese Hezbollah, the Houthis are the crown jewel in Iran's Axis --

SOARES: Yes --

CLARKE: Of Resistance.

SOARES: Very briefly, because I know my producer is going to tell me to wrap, but, you know, are they a proxy or are they an ally? And the reason I

ask this, because how far are they prepared to go for Iran here, Colin?

CLARKE: You know, I'm not too concerned over what to label them. But it is sufficed to say --

SOARES: Yes --

CLARKE: The Houthis' goals are also going to benefit Iran. So, it's a kind of double tap in that sense --

SOARES: Right, yes, appreciate it, Colin, good to see you. Colin Clarke there for us. Well, after facing repeated trade and tariff threats from

U.S. President Donald Trump, Canada and the EU are now talking about an unprecedented relationship.

The EU today proposed adding Canada as its first ever Associate Member. The offer came as Canadian Prime Minister, you can see there, Mark Carney is on

a visit to Europe. It is not clear exactly how the Associate Membership would work or what exactly it would entail.

The European Commission President signaled this is not a response to strained relations with the US, but about forming a natural partnership

with a long-time ally.

(BEGIN VIDEO CLIP)

URSULA VON DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: We will integrate defense industrial bases. We will make the Arctic a flagship joint project.

We will work on energy, critical minerals and batteries on A.I., Quantum, Cyber and Economic Security. This is not a partnership against anyone else,

but for our common strength.

(END VIDEO CLIP)

SOARES: Well, let's get more, Anna Stewart joins me now. Anna, I'm not sure whether we've got many answers to the question. What exactly then is

this Associate Membership? Because it doesn't exist, right? So, what more do we know about this?

ANNA STEWART, CNN CORRESPONDENT: No, I mean, the EU is not like a gym with multiple tiers of memberships. And so, we're not quite clear what Associate

Member is. Clearly, Canada is not in Europe. It's not becoming an EU member state.

It's not trying to be. So, we have accession members normally that want to be full EU members and nothing else really, other than, I guess, Schengen

Agreements and some trade agreements. But yes, an Associate Member.

So, we don't have the details. We know it's not a trade deal because the EU and Canada already have a free trade deal, a great one. It was signed

around nine years ago. And it means that something like 90 percent of trade between the two countries is currently tariff free.

Extraordinarily, despite it being implemented, I think nine years ago on provisional basis, I think ten EU member states still haven't ratified it

to this day.

[14:20:00]

So, that leaves us with a question, what could this be in sort of real terms? Ursula von der Leyen did mention manufacturing technology, A.I.,

defense, energy, critical minerals, economic securities as all areas they could be looking at to cooperate with.

And some people question, well, what could each side want from a closer partnership from the EU side? Perhaps they'd want greater access to

Canadian gas or critical raw minerals, for instance. From the Canadian side, perhaps, they would like to be able to live and work throughout the

EU bloc.

That would clearly be very valuable. So, there are areas that they could work upon, but we just don't know yet, Isa, it's very exciting. More to

come, I think.

SOARES: Yes, and look, more to come. And we know knowing how the EU works, everything takes a long time, Anna. So, goodness knows when this membership

will come into force. But look, Ursula von der Leyen did say that this is not a partnership against anyone else.

But the timing is interesting, right? So, I wonder whether people are reading into this because it comes, of course, as Canada faces a

deteriorating relationship with the United States over this aggressive use of tariffs. So, speak to that and the timing of this, Anna.

STEWART: Yes, there is a trade war between the U.S. and Canada. And hey, we have context going back months right at the beginning of the year, Prime

Minister --

SOARES: Yes --

STEWART: Carney was at Davos and he made quite a splash when he said in a speech, there is a need for middle powers to act in concert amid a rupture

in the world order. And it wasn't a struggle for anyone to see that this was to do with the trade policy of the U.S. and allies from Canada and

Europe then working together.

So, this isn't new in that sense. There is a sense that there's going to be a stronger alliance. And there was actually a very interesting part of the

speech today from Ursula von der Leyen, not only the bit you mentioned, where she says, this isn't about, you know, this isn't political, this

isn't a move against anyone.

But she did say, we will integrate defense industrial bases and will make the Arctic a flagship joint project. Now, of course, Arctic, Greenland,

that is very much --

SOARES: Yes --

STEWART: A hot topic when it comes to Trump relations. So, you know, you can read in a little bit of politics, I think there.

SOARES: Absolutely, Anna, really appreciate it, Anna Stewart there. And still to come tonight on the show, Germany's Chancellor is canceling a

visit to the U.S., and it has nothing to do with Trans-Atlantic relations.

And then later, Russian strikes near NATO's eastern frontier have Europe on edge. The new strategy pitched by the EU to counter Russian aggression. And

that is coming up. You are watching CNN.

(COMMERCIAL BREAK)

[14:25:00]

SOARES: Well, Germany's Chancellor is canceling a planned trip to the United Nations General Assembly next week. Friedrich Merz has opted to stay

home amid growing pressure over his party's inability to fight off the far- right Alternative for Germany Party.

There are more state elections this weekend in Germany, where the AfD is expected to gain post -- again paste big gains on Merz's center right CDU

Party. Our Frederik Pleitgen is tracking this story for us. He joins me now live from Berlin.

And Fred, I mean, this is significant. I mean, we normally don't focus so much on canceled planned trips, right? But this is significant because it

does speak to the pressure that he's facing at home following, of course, the CDU's poor performance. So, the question then becomes what is the

strategy for him ahead of these elections?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, first of all, Isa, you're absolutely right, it's definitely significant and

definitely something that caused a lot of waves here in political Berlin.

And certainly, people here understand that Friedrich Merz, right now is actually fighting for his political survival. And the strategy right now

seems to be to try and gain support within the political party, within the Christian Democratic Union.

And you're absolutely right, right now, at the moment, Friedrich Merz and his chancellorship and his coalition has been on a downward trajectory. And

that started about a week-and-a-half ago when they -- I mean, one has to say, got annihilated by the far-right Alternative for Germany in that state

election in Saxony-Anhalt.

Where his political party, the CDU, actually did a lot worse than people think -- people had thought that they -- that they would do. On top of

that, his personal popularity ratings also are very low. His likability ratings also are very low as well.

And that's something that has also caused, in general, the coalition that he's leading together with the Social Democrats to really start plunging in

opinion polls that we've been sort of monitoring over this next week.

Now, you were talking about those elections that are coming up this next weekend, and that certainly seems to be a litmus test for whether or not

Friedrich Merz is going to survive and get through the rest of his planned chancellorship.

And right now, it certainly looks as though one of the elections is here in Berlin in the capital, and another one is in the former east German state

called Mecklenburg-Vorpommern, in the northeast of Germany.

And there, it's unclear whether or not Friedrich Merz's political party, the CDU, is even going to make the threshold to get into the state

parliament there. And certainly, if they show badly there, if they don't make that, the air could get very thin for Friedrich Merz.

He did get one boost, actually, today, a couple of hours ago, where all of the state governors from his political party, from the CDU, backed him and

said that they wanted him to remain chancellor.

Nevertheless, that does not change his personal likability ratings, and certainly also the dissatisfaction that many Germans feel with the current

governing coalition here in Berlin, Isa.

SOARES: I mean, that is staggering if it doesn't meet the threshold, that is a huge concern. But, you know, I've been following the news, of course,

out of Germany, and I wonder whether -- I wonder how much, Fred, it is policy. How much is personality?

Because I was looking at some of the last weekend polling by INSA, which found that a majority of CDU supporters no longer believe that he's the

right person for the job, with some even wondering on social media, lots of speculation whether he's an electoral liability.

So, is there talk circulating in Berlin and in Germany about a replacement already, and who would that be, or am I too far ahead here?

PLEITGEN: Yes -- no. Well, I don't think that you're too far ahead at all. And certainly, is a discussion that's been going on. And I think that you

make that very interesting distinction, whether or not it's policy or whether or not it's personality, that's really making the difference here.

And there are many people who would say that it's both. There's certainly a lot of policy measures that people here really didn't appreciate. One of

the things that Friedrich Merz did even before he took office is in the outgoing last parliament, he took on some of the largest or if not the

largest debt that Germany had ever taken on.

And that was after promising not to do that. So, he entered into his chancellorship, already, many people feeling that he had not told the truth

on that issue. And that certainly caused a lot of people to question the honesty of Friedrich Merz and the honesty of this government.

So far, certainly, a lot of people will say that they have been disappointed in some of the measures, but also those likability ratings are

not good. There are two names that keep getting mentioned. One of them is the Governor of the state of North Rhine-Westphalia, Hendrik Wust, the

other one, the governor of Bavaria.

But again, unclear whether or not any of those two are actually going to come out of the woodwork and try to make a run for the chancellorship

against Friedrich Merz any time soon. Isa.

SOARES: I know you'll be following this closely for us. Always appreciative. Good to see you, Fred, thank you very much. Fred Pleitgen

live for us there in Berlin. Turning now to Russia's war on Ukraine, where Russian drone has hit a passenger train.

Ukrainian officials say the attack happened on Wednesday as a train was traveling south from the capital, Kyiv. The railway operator says all

passengers were safely evacuated. And this comes as Poland is reinforcing its borders with Ukraine. Recent strikes near border crossings have Polish

officials worried about potential moves by Russia.

And still to come tonight, right here on the show, we'll take you to the U.S. Federal Reserve where Chair Kevin Warsh will speak after the Central

Bank announced it will raise rates for the first time since 2023. We'll keep an eye on that, on the stock markets and whether President Trump will

react to this. That's next.

(COMMERCIAL BREAK)

SOARES: Well, let me just show you, Fed chair, as you can see there in Washington, D.C., Kevin Warsh has taken to the podium. This is after the

central bank in the last, what, 33 minutes or so hiked a key benchmark interest rate by a quarter point. It is, as you heard from our Richard

Quest at the top of the show, the first increase since 2023, as the U.S. central bank battles, really, with inflation that has been fueled by the

war with Iran.

We are continuing to monitor Kevin Warsh. He did say, just as he took to the podium, that the decision, the decision, of course, to hike rates comes

at a time when the U.S. economy is strong, it seems. But it's interesting of the decision itself, because all of the Fed's policymakers were actually

on board with the decision. And that includes Kevin Warsh himself, that really underscores the concerns they have with inflation, which have been

elevated over the past five years.

And now, of course, with the war in Iran has exacerbated because of the oil prices. We are going to continue listening. As soon as Kevin Warsh takes

questions, we will turn to that and we'll bring you that part of his press conference.

Well, the Fed rate hike comes, as I was saying, amid rising inflation, not just in the United States, but right around the world, and anger over the

soaring cost of fuel and other essentials is really boiling over around the world.

[14:35:00]

You are looking, let me show you this, at sort of scenes not seen in Syria since the fall of the Assad regime. In the past few days, Syrians have

staged large protests. Syrian media report diesel prices have risen by 40 percent and gas prices up by a quarter.

Lawmakers, meanwhile, in Guatemala are scrambling to push for a deal through a proposed law to cap fuel prices until the end of the year. That's

after groups of truckers and other protesters blocked highways and marched through the capital.

And in Europe, in France, to be precise, demonstrators scuffled with police after dozens of fishermen blockaded a major fuel depot in a southern

coastal town. A local mayor says rising costs and insufficient income are creating a crisis for the fishing industry. And it doesn't end there in

Europe.

There have also been protests in Portugal. From Portugal to the Philippines, over the past few days, Portugal this week announced a new

package of measures to help ease the fuel price crunch.

So, we are -- it gives you a sense of the pressures not only facing the Federal Reserve and Kevin Warsh in the United States, but in fact facing

many central banks right around the world. So, as soon as we hear from Kevin Warsh taking questions from journalists, we'll bring that to you.

We're also keeping an eye on the Dow. If I bring up the Dow for just a second, because it was pretty flat when I looked at the top of the show. It

was -- just so you know, this was priced in. It was priced in, about 90 percent or so priced in, but you're seeing it was flat. Now, it's almost

half a percent down, 253 at 51,000 or so. It will be interesting to see when Kevin Warsh is done speaking how much that fluctuates. We have seen

the dip. So, let's listen in fact to Kevin Warsh.

KEVIN WARSH, CHAIR, U.S. FEDERAL RESERVE: Next year, inflation risks are to the upside, while labor risks are roughly balanced. In my meetings these

last few weeks, in Jackson Hole, in Asheville at the G20 meeting, which the U.S. hosted, and at a central bank conference in Basel, it was evident that

most advanced economies are facing price pressures. Their central banks are making their own judgments, consistent with their own remits. Our decision

today reflects our best judgment in service to our remit.

The Fed has a role in sustaining the economic progress happening in America right now, and the rising opportunities that come with it. Those who are

least well off have the most to gain from a durable expansion, a solid labor market, and stable prices. We at the Fed are unwavering in our vital

and straightforward purpose of ensuring full employment and price stability, and a thriving American economy that sets the standard for the

world. And with that, I'll take a few of your questions. Thank you.

RICHARD ESCOBEDO, CBS: Chair Warsh, thank you for doing this. I'm Richard Escobedo with CBS. Let me navigate over my questions. You know, a quarter-

point rate hike does not reopen the Strait of Hormuz, and so I wonder how you think these smaller rate hikes will be effective when it can't

necessarily address the energy supply side of inflationary pressures.

WARSH: Yes. It's a good question, Richard. We cannot affect any individual price, whether it be oil prices, whether it be foodstuffs at the grocery

store. But what we can do and will do is ensure that any change in relative prices don't broaden out, don't have second- and third-order effects on the

economy. That's what we're tasked to do, and that's what we will do.

COLBY SMITH, THE NEW YORK TIMES: Thank you. Colby Smith from The New York Times. When the Fed starts raising rates, it generally follows with a

sequence of hikes. Is there anything different in today's assessment of the economic conditions that would suggest that the typical pattern does not

apply? And I guess second to that, what impact do you expect higher rates to have at this juncture if the bulk of what is keeping inflation elevated

is stemming from supply shocks?

WARSH: So, we're trying to get to more people, so I get to cherry-pick my preferred question from you, Colby. This won't surprise you. I'm not in the

forward guidance business. The decision we made today was a sober decision, serious decision, responsible decision, one that we have been preparing for

and thinking about in my 110 or 20 days here.

You heard from other people in the dots effectively what their forecasts are. I'm not going to prejudge any future decisions we make. You might have

heard me say in Jackson Hole, I committed to a discipline, a set of principles. I committed to look outside the window and see what I can

observe. That's what I did in Jackson. That's what we did today.

[14:45:00]

UNIDENTIFIED FEMALE: Edward Lawrence.

EDWARD LAWRENCE, FOX BUSINESS: Thank you, Mr. Chairman. Edward Lawrence from Fox Business. So, the market priced in a 90 percent chance of a rate

hike today. You don't want the Fed to lead the markets. Was this a market- led rate hike? And then with that, the bond yields are going up. That's one of the indicators. Is debt part of that issue?

WARSH: So, I've said this before. I'll repeat it. The Fed has an enormous amount of power. These are decisions we make. But getting the understanding

right between financial markets and the Fed is a balance that I've long thought could be better struck. We made this decision today based on our

assessment of the situation, based on our assessment of the trajectory for employment, based on our judgment on the strength of the economy. Sometimes

the market tries to prejudge our outcomes. I'll observe market prices and see what they have to say. But today was our decision.

UNIDENTIFIED FEMALE: Steve Thompson, Washington Post. Elizabeth Schulze.

ELIZABETH SCHULZE, ABC NEWS: Thanks so much. Elizabeth Schulze with ABC News. Big picture. I wonder if you could tell us just what will this move

today actually do for American consumers? And I have to ask, what is your message here to President Trump, who has repeatedly called to cut interest

rates, not raise them?

WARSH: I've got nothing for you on a discussion with the president. So -- but I won't make that count as your question. On the American people, as I

said in my prepared remarks, the least well-off are the ones who have the most to gain from stable prices. The decision we made today was the right

decision to deliver on the remit that Congress gave us to ensure stable prices.

Moreover, I would say, because of the underlying strength of the economy, because we are, as I mentioned, largely acting consistent with full

employment, we can be focused on stable prices. Some months ago I said we will deliver stable prices. Today's action is consistent with that.

UNIDENTIFIED FEMALE: Chris Rugaber (ph).

UNIDENTIFIED MALE: Hi, how are you? Thank you. Can you tell us a little more about what changed from the July meeting when, as you noted, the Fed

did stand pat until today? And as part of that, could you give us a sense of whether or not things like the retail sales report today suggested that

demand is heating up and possibly threatening higher prices as well? Thank you.

WARSH: Yes. So, as you might know, I'm not a data-point-dependent guy, so I won't react one way or another to data that shows up on our doorstep. But

on your first question, I think the more important one, what transpired in the seven weeks since we last met? First, I would say a good majority of my

colleagues seven weeks ago thought seven weeks is a good investment. It's a way to buy time so we can make a wise decision.

I'll highlight three things that have happened in that intermeeting period. One is I made out a judgment seven weeks ago about the strength of the

economy. There's been a pretty wide-ranging set of data, including the labor markets, that the economy has strengthened. You might have heard me

say that in Jackson Hole a few weeks ago. It's a judgment that I have and the committee has.

Second, inflation trends. I said in Jackson Hole, trends matter. I said in Jackson Hole, we need to look outside the window and interrogate reality.

My judgment some weeks ago was the inflation summer trends weren't passing the test. I've seen very little information since that would make me

reverse that decision, so I've stuck with it.

And the third thing that's changed in seven weeks are geopolitics. There's no hiding from hotspots around the world. And our judgment about what is

the most likely or least likely of the geopolitical situation has changed. All three of those things lend themselves to a firm, unanimous decision

today.

SOARES: You have been listening there to the U.S. Fed Chair, Kevin Warsh, who has just been speaking for the last 14 minutes or so after the central

bank hiked interest rates by a quarter point. It is the first increase, by the way, since 2023 as the central bank tries to keep a lid and battles

with inflation.

He was asked what judgment, why that judgment, what's changed? And he said one of the reasons is geopolitics. That's what we saw when the statement

came out earlier saying the economic activity is expanding at a solid pace while uncertainty remains elevated.

[14:45:00]

Owning in part, he says, to geopolitical developments, domestic spending has been resilient. He won't give. He said that the decision today was a

sober, responsible and serious decision. It was also, by the way, a unanimous decision by the Fed.

So, he was asked very quickly about how President Trump would react. President Trump nominated Kevin Warsh, often with previous Fed chair, had

attacked the Fed chairs because he wanted rate cuts. Well, he's not getting that. So, we will wait to see what the president will say. But Fed chair

there not even answering that question on regarding the discussions that have been had with the U.S. president.

We'll keep an eye on what he says and a look at the stock markets. We are going to take a short break. Do stay right here.

(COMMERCIAL BREAK)

SOARES: Ed Sheeran's concert tour has been deeply shaken as many acts abandoned their opening slots. This after rapper Macklemore was dropped

from the U.S. leg following pro-Palestine comments on stage in New Jersey.

(BEGIN VIDEO CLIP)

MACKLEMORE, RAPPER: I wanted to stand up here on stages and stadiums across America and say two words that are very near and dear to my heart.

Free Palestine. I said, free Palestine.

(END VIDEO CLIP)

SOARES: While the other artists quit in support of Macklemore, on Monday, New England Patriots owner, Robert Kraft, said he would bar the rapper from

performing at Gillette Stadium in Massachusetts this month. Kraft is an advocate for Israel. Macklemore has publicly endorsed Palestinian rights

and regularly performed at pro-Palestinian rallies.

New York Congresswoman Alexandria Ocasio-Cortez said Ed Sheeran is just part of the issue when it comes because she believes Kraft and other

stadium owners are the bigger problem.

(BEGIN VIDEO CLIP)

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): I think the right thing to do is at the very least to speak out about this abuse of power. Because if they're

saying that to him, right, then they can say it to anybody. And at what point does it stop? I think people want the focus here to be about Ed

Sheeran. And he, of course, plays a role.

[14:50:00]

But they're not putting the focus on Robert Kraft and, you know, the actual people who are kind of twisting things here.

(END VIDEO CLIP)

SOARES: Let's get more from CNN. Lisa Respers France, who joins us now. And I think it's interesting what she said there, Lisa, because according

to Ed Sheeran and the statement he put out on his social media, He said the problem was the promoter and their stadium, and he said, I spoke with the

venues at length all week to try and build a bridge. One of those people was Robert Kraft. Of course, Kraft is the billionaire owner of the New

England Patriots.

And according to Sheeran, he said venue and promoter's decision was final. Have we heard at all, as we talk about this story, from the promoters or

from Robert Kraft about this and the concerns they had?

LISA RESPERS FRANCE, CNN SENIOR ENTERTAINMENT REPORTER: Well, most of the focus is, of course, on Ed Sheeran. And Robert Kraft, in saying that he did

not want this concert to be played at Gillette Stadium, which he owns, he said he felt like it was crossing a line for the Jewish community.

We know that he is very sympathetic to the Jewish community. We know that he has pulled money from a university because he did not like the pro-

Palestinian protests that were happening there. And so -- but most of the focus has been on Ed Sheeran and what Ed Sheeran had to say. You shared

some of his statement, and it's clear that he is trying to put the onus on the promoters. So, he, you know, wanted people to know that he is

sympathetic. He said that he's not complicit, but that just because he doesn't share publicly how he feels doesn't mean that he's not aware of

what's going on.

But other people, you know, have been very passionate. You know, we have a statement, Macklemore coming off tour was the promoter's decision. It was

not mine. Macklemore's contract for the tour was with the promoter, not me. I am not complicit.

So, he wants the world to know that this is not, you know, his fault. But it is bothersome enough to the people who were involved, who were going to

open for him, that they feel like they need to stand in solidarity with Macklemore because they feel so strongly about it.

So, you're talking about Finneas, the producer, who is also the brother of pop star Billie Eilish. You're talking about Aaron Rowe, who is an Irish

singer and songwriter, Beoga, who is an Irish group, and then the Danish band, Lukas Graham. All of them have decided that they do not want to

participate. And Aaron Rowe actually released a statement in which he said, you know, he tied it to his being Irish. And then he said that they

understand about genocide, and that's why he does not want to participate.

So, this is where we are with a lot of people questioning, can this tour even go on now that all the opening acts have pulled out?

SOARES: Yes, that is a question indeed. Lisa Respers France, thank you. Lisa, appreciate it. Thank you.

FRANCE: Thank you.

SOARES: We're going to take a short break. We'll see you on the other side.

(COMMERCIAL BREAK)

[14:55:00]

SOARES: One of Hollywood's most important records has been broken. "Spider-Man: Brand New Day" is now the all-time box office champion in the

United States and Canada. On Tuesday, it reached $937 million in ticket sales, passing "Star Wars: The Force Awakens" as the biggest movie ever at

the domestic box office. But Spidey still has a long way to go to reach the global box office crown. That record still belongs to "Avatar," and it

seems unlikely that Spidey will catch it. I have yet to see the latest Spider-Man movie. My kids though tell me it was brilliant.

That does it for tonight. Thanks very much for your company. Very busy hour of breaking news. Do stay right here. "What We Know" with Max is up next.

(COMMERCIAL BREAK)

[15:00:00]

END