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Quest Means Business
U.S. Federal Reserve Says Rate Hike Appropriate Soon; U.S. Delivers Written Response To Russia's Security Demands; U.S. Supreme Court Justice Stephen Breyer Retiring; British Prime Minister Boris Johnson Says He Won't Resign As Partygate Report Looms; Majority Of British Adults Think Boris Johnson Should Resign; Dash To The Bell. Aired 3-4p ET
Aired January 26, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:16]
ALISON KOSIK, CNN BUSINESS HOST: The markets are hanging on Jerome Powell's every word this hour. The Dow is flat. The S&P and the NASDAQ are
both holding on to some gains. Those are the markets and these are the main events.
Soon, the Fed signals it is preparing to raise rates as inflation is spreading.
A door to dialogue. The U.S. replies to Russia saying it offers a diplomatic path forward.
And Boris Johnson says he won't resign even as 62 percent of British adults say it's time for the Prime Minister to go.
Live from New York, it is Wednesday, January 26th. I'm Alison Kosik, in for Richard Quest and this is QUEST MEANS BUSINESS.
Tonight, the Federal Reserve says inflation is spreading and that a rate hike would be coming soon after wrapping up its first meeting of the year.
The Bank said it would be quote "appropriate" to raise rates soon. Markets are preparing for four interest rate hikes this year at least.
The U.S. Central Bank says it's going to get inflation under control after watching the consumer price index reach seven percent. That's its highest
level in almost 40 years.
Federal Reserve Chair Jerome Powell will explain why inflation was becoming persistent.
(BEGIN VIDEO CLIP)
JEROME POWELL, CHAIRMAN, U.S. FEDERAL RESERVE: Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to
contribute to elevated levels of inflation. In particular, bottlenecks and supply constraints are limiting how quickly production can respond to
higher demand in the near term. These problems have been larger and longer lasting than anticipated, exacerbated by waves of the virus.
While the drivers of higher inflation have been predominantly connected to the dislocations caused by the pandemic, price increases have now spread to
a broader range of goods and services.
(END VIDEO CLIP)
KOSIK: Wall Street lost its steam as Fed Chair Powell began his press conference today. You see the Dow had been up all day. That's a first this
week, which has been marked by two volatile sessions. The S&P 500 and the NASDAQ, they are off their session highs. Many market analysts expect once
again at least four rate hikes this year to bring the benchmark rate to one percent.
Matt Egan joins us now. Matt, I know you've been keeping an eye on this press conference. It has been going on about a half hour. What has caused
the market to flip?
MATT EGAN, CNN REPORTER: Well, Alison, I don't know that there is anything specific that really caused the market to go down to session lows. Just a
few minutes ago, the S&P 500 turned negative on the day for the first time. You see the Dow at session lows as well. I think this is a realization that
the Fed is stepping up its fight against inflation, and that it's not going to be easy.
And at a minimum, it means that that easy money that investors love that forces money into stocks, that is going away. You know, Jerome Powell said
during this press conference that March is likely the date when they're going to raise interest rates and that's a big deal. It's the first rate
hike in more than three years.
And not just that, but it is really the primary way that any institution in the Federal government can actually fight back against inflation. And also,
the Fed said that if everything goes as planned, they're going to wrap up the bond buying stimulus program known as quantitative easing in early
March, that's also a big deal.
It's expected, but it is significant because the Fed was buying $120 billion of bonds every single month that started in March 2020, when the
world was turned upside down by COVID. And that also was really great for the stock market.
And so Powell said today, he said, look, all of the support, low rates, and QE, it is not really needed anymore. The statement from the Fed, you know,
specifically said that, you know, with inflation well above two percent, as you mentioned, it's at seven percent, it is nowhere near two percent, then
also with a strong labor market, unemployment is at 3.9 percent. You combine that and the Committee expects it is going to be appropriate to
raise interest rates in March, and I think that makes sense.
But it is going to be a big shift for the market to get used to, and I think you're seeing some of that nervousness play out now -- Alison.
KOSIK: And we are seeing that nervousness play out. We are seeing the Dow fall now 230 points there on your screen. Can you -- I know you've been
listening to the news conference. Has anything sort of jumped out at you, you know maybe has Jay Powell talked about, you know when he sees inflation
maybe pulling back once those interest rates start rising?
[15:05:11]
EGAN: Right. Well, Powell, he talked about how some of the things that are pushing up inflation are going to go away. Obviously, the Fed is going
to become less supportive, but that takes time to play out. I mean, it could take six months to actually trickle into the real economy, but that's
one thing.
He also mentioned, I thought this was interesting, he mentioned fiscal policy, that there's going to be less fiscal support and that is because in
large part, President Biden's Build Back Better Act has not gotten off the ground, that may not happen. If it does happen, it may not be as strong as
previously expected. The Child Tax Credit is going away or has gone away, and so that means less support for the economy.
And then Powell also mentioned, you know, that they expect supply chain pressure to get better, but he also acknowledged that there is a lot of
uncertainty around those inflationary pressures and he said that, you know, the Fed is going to be humble and nimble, which makes sense, because he
acknowledged that the Fed didn't really get inflation right, that inflationary pressures have been more persistent and lasted longer than the
Fed or the White House or investors had really anticipated.
And so I think being humble makes sense. I think what is clear is that unless something really dramatic happens in the economy or in financial
markets, the Fed is going to push ahead and get off zero in March, wrap up QE, and then from there, you know, how much higher they raise interest
rates, how fast they do it, when they start to shrink the balance sheet, I think that's going to really depend on how the economy is evolving and what
happens in financial markets -- Alison.
KOSIK: All right, Matt Egan. Thanks for breaking all that down for us.
The Federal Reserve's Open Market Committee is set to meet eight times this year and analysts expect it to raise at least four times, interest rates.
Since it just decided to keep rates steady, that leaves seven meetings for four hikes to meet those expectations. Higher inflation has put pressure on
certain sectors of the markets.
Tech stocks we've seen have gotten squeezed. The NASDAQ is down more than 10 percent this year. Future earnings look less appealing with higher rates
for those tech stocks. So, investors ditched those growth stocks. Earnings for energy companies, they are more appealing because inflation drives up
energy prices and boosts profits.
Some analysts expect S&P 500 energy companies to report a 70 percent increase in revenue last quarter. Brent crude currently is climbing above
$90.00 a barrel today.
CNN's global economic analyst, Rana Foroohar joins us now. Rana, you know, you watching the market completely flip based on what Jerome Powell is
saying really shows the concern that is just making its way through the markets.
The big worry here is that the Fed is going to go ahead and embark on an aggressive interest rate hiking path, and combine that with a reversal of,
you know, the Central Bank's bond buying program, and the concern, of course, is that that can cause a sharp slowdown. So, the question to you
is, does the Fed really need to be careful here to not overdo it?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, you know, in a word, yes. That said, it's really hard to argue when you have inflation at 40-year
highs, when you have a labor market as tight as it is now, wages rising as they are. It is hard to argue that you need more stimulus.
You know, I've been arguing for some time that the Fed should have pulled back earlier on even pre-pandemic in order to sort of give that space that
when there is a downturn, you have a little more leeway. That wasn't a decision that was made. And so now they're in a situation where, you know,
they may be behind the curve, in fact, so far behind, they may not be able to see the curve, inflation has risen very sharply.
And so I do expect that this is going to be a pretty quick uptick, and I think it's going to be a very volatile year for markets.
KOSIK: Do you think the Fed could wind up tightening the U.S. economy into a recession?
FOROOHAR: You know, it's a possibility, Alison. I think that we are at the most delicate moment that I can remember, frankly, in my 32 years covering
markets, in terms of making policy. I mean, there's so many things going on, if you just think about the supply chain issues for one, China is now
being locked down again. We're probably going to see more delays on supply chains, that's going to trickle through later on into the economy, into the
U.S. and Europe.
It's almost as though there's a sort of a bullwhip, you know that's being cracked and it moves at different time periods, different regions are not
in sync as they have been over, you know many years now. It is unprecedented and so, I think investors and consumers and workers really
have to strap in and be prepared for a lot of up and down in the coming year.
[15:10:11]
KOSIK: And as we talk here, the Dow falling further, now down 322 points. And so it brings me to this, although the Fed is not supposed to
watch what happens in the market, how much of a drop in the market do you think is the Fed willing to stomach to fight inflation?
FOROOHAR: You know, Alison, that is a great question. You're absolutely right that they traditionally have not looked to the stock market. In fact,
you know, many people, myself included, have said that the stock market isn't really reality, right? You know, asset prices can go up, it doesn't
change the story for companies or consumers on the ground.
But the honest truth is, we have become as an American economy, so dependent on high asset prices that I think it will -- the Fed will be hard
pressed not to take that into account. I think that what is going to happen is, you're going to see, let's say, you know, we get not just a 10 percent
correction, but a 20 or 30, I mean, you know, there are serious investors that have predicted a 40 or 50 percent correction in the market.
If that were to happen, you're going to see the stock market leading an economic downturn on Main Street. At that point, absolutely, the Fed would
have to act.
KOSIK: Yes, that's all about confidence, isn't it? All right, Rana Foroohar, global economic analyst, Rana Foroohar, thanks so much for your
perspective today.
Still ahead, the U.S. has raised the possibility of sanctions against the Russian President. The Kremlin says that would be a political mistake.
We'll have more on Moscow's response.
(COMMERCIAL BREAK)
KOSIK: The U.S. has delivered a written response to Russia addressing its security demands over Ukraine. Secretary of State Antony Blinken didn't
give specific details, but said the U.S. had again rejected Moscow's demand to bar Ukraine from ever joining NATO. And he says, the written document
offered Russia a serious diplomatic path forward.
(BEGIN VIDEO CLIP)
ANTONY BLINKEN, U.S. SECRETARY OF STATE: We make clear that there are core principles that we are committed to uphold and defend, including Ukraine's
sovereignty and territorial integrity, and the right of states to choose their own security arrangements and alliances.
We've addressed the possibility of reciprocal transparency measures regarding force posture in Ukraine, as well as measures to increase
confidence regarding military exercises and maneuvers in Europe.
(END VIDEO CLIP)
KOSIK: Meantime, NATO sent it to own response to Moscow urging the Kremlin to deescalate tensions and embrace diplomacy. The U.S. and U.K.
have raised the possibility of sanctions against Vladimir Putin if he invades Ukraine.
[15:15:12]
President Biden told CNN he could see that happening, and the British Foreign Secretary said the U.K. wouldn't rule it out. The Kremlin says
sanctions against Russian officials would be politically destructive, but not painful.
Our international diplomatic editor, Nic Robertson is in Moscow now. What more are you learning?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, these are the letters that Russia was waiting for, what we heard from Sergey Lavrov, the
Russian Foreign Minister earlier in the day saying that they would take -- his office would take these letters, and that's where they were delivered
to -- take the letters and then work on proposals if the letters were suitable to present to President Putin.
But he laid down some clear criteria about the letters and that was that they should be constructive, and that they shouldn't use the -- they
shouldn't use the aggressive language that's been used up until now.
So it's not clear how real how quickly Russia will actually respond to these written letters, and then it is not clear what they'll be able to
respond, because there are some very clear, if you will, so far, at least red lines in there, and that is the open door policy that Secretary of
State Antony Blinken was talking about that would allow Ukraine or other countries like Georgia, to join NATO.
So at the moment, you know, sort of in diplomatic terms, the ball is in the Russian court. Secretary Blinken described the letters as you know, not a
negotiating strategy, not a formal proposal, but something to begin a dialogue to show the areas where there could be cooperation.
And I think it was Jan Stoltenberg in his press conference really kind of gave that the scope of what could be on offer, where both sides could sort
of get something out of it like short range missile control, medium distance missile control, positioning of troops, nuclear arms control,
cyber threat control, the list went on, I think even space military threats were within the scope of what NATO and Russia could discuss going forward.
But that hasn't been the focus of what Russia wants so far.
KOSIK: Can you tell because I know you've been covering this from the very beginning, if we are closer to war than let's say we were three weeks
ago? I mean, it feels like with -- you know, sending this written response back to the Kremlin and still not giving into what Russia wants, that we're
sort of in the same spot here.
ROBERTSON: In many ways, this is what Russia wanted. It wanted the United States and NATO to engage in their formal proposals, in a written response
and that's taken some time that the verbal response has been replicated in the written response. So in that context, not much further forward.
And yes, in terms of actually going to war, more war pieces and equipment that can fight a war and more positioned, better positioned to fight a war
in Ukraine, the military exercises in Belarus compared to a couple of weeks ago, at a much bigger scale and scope. Yes, Russia's big fighter bomber
aircraft have gone in there today. They've been moving in a lot of equipment by rail, by road.
There have been sophisticated surface-to-air missile systems, moved into Belarus, very close to Kyiv, the capital of Ukraine. So, the wherewithal to
fight a war if there was one is there, but what experts would look for would be, it's not just having the likes of paratroopers who have recently
arrived in Belarus for these military exercises, but are they essentially getting their vehicles lined up, fueled up?
Are the fuel trucks coming in? Are they moving into battle formations? Can you see them arrayed in such a way that they are prepared to move across
borders? That seems to be lacking? That's what the Ukrainians are saying and that seems to be the assessment. But as far as the language from the
Russians is concerned, it is not explicitly talking about a war, it is looking at potential flashpoints in Ukraine, but not a war per se.
KOSIK: Okay. Nic Robertson, thanks so much for all that great context.
The head of Ukraine's state-owned energy Naftogaz says the Kremlin is using Russian gas against Europe and the West. Yuriy Vitrenko spoke to CNN's
Julia Chatterley earlier and accused Moscow of trying to cause panic and economic damage in Ukraine. He also called it a moment of truth for the new
German government.
(BEGIN VIDEO CLIP)
YURIY VITRENKO, CEO, NAFTOGAZ: Putin used gas as a weapon even before the joint statement on the U.S. and German government, but after the statement,
he started to do it more intensively and into the face of the entire world.
[15:20:07]
They decrease the supplies of gas, they blackmailed Moldova. They scared off some ships in the Black Sea that were doing some seismic studies for us
to produce more of Ukrainian gas. So, they are using gas as a weapon as we speak. And then, of course, something that needs some reaction from the
West.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: What is the new German government saying to you? And what assurances are they providing?
VITRENKO: Currently, they are using this benefit of being a new government because I was telling the previous government, but again, their new
government is not that new any longer, so that's why they also need to make this decision. They need to decide if they are with the free world, or they
want to collaborate with Putin and with Russia in his fight with the free world.
So in this particular case, we do believe and we're telling them that they should punish Russia for using gas as a weapon. They should also prevent
North Stream 2 and Gazprom in general to be above the rules in Europe, because Nord Stream 2, for example, this project is not compliant with
European rules at the moment, that's why it cannot become operating.
So it's a moment of truth for the German government, for the new German government to show that they are with the free world and they deserve to be
one of the leaders of the united Europe.
(END VIDEO CLIP)
KOSIK: An imminent retirement on the U.S. Supreme Court is giving Joe Biden a chance to make good on his promise to nominate a black woman to the
country's highest court. Sources tell CNN, Justice Stephen Breyer will officially announce his retirement Thursday.
President Biden's fellow Democrats are calling on him to fulfill his campaign pledge to nominate an African-American woman. The White House
hasn't made any comments yet.
Jessica Schneider joins us now. So Jessica, walk us through why Justice Breyer's retirement is such a key moment, not just for Democrats, but for
America right now.
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: It is indeed. I mean, the Supreme Court has really become a focal point for the public, and this is
actually a retirement progressive groups have been pushing for the past year here.
Justice Breyer brushed aside the calls last June when that term ended, but now, there are just months until the midterms and Republicans have already
promised that they would thwart a Biden pick if they win. So, Justice Breyer potentially injected some political calculation into this decision
to retire and potentially to announce it so far before the end of the term, five months until the term is over.
Breyer has been a Justice on the Supreme Court for 27 years. But notably, he was in politics before becoming a Judge. He worked on the Senate
Judiciary Committee for Democrats. He investigated Watergate in the 1970s. So he really understands the political realities of this situation.
As for retirement, Justice Breyer has repeatedly said over the past year that he would consider two things when deciding to leave: His health, and
the Court. HE has no known health issues, but it is clear that the Court's future is the main reason for him leaving. He has talked repeatedly about
the importance of the integrity of the Court, the danger of public faith in the Court eroding if it becomes too political, but there is probably some
political calculation in this decision.
Justice Breyer, he will stay on through at least the end of the term, which ends in June. There are still a lot to be decided this term, including
issues on abortion rights, gun rights, but then the real work for the White House begins. They will be considering who they might nominate, vetting
those candidates. Notably, they probably have already been doing it all this time. They'll eventually announce a nominee, and then it will be up to
the Senate.
And Democrats in the Senate, they have already come forward saying they will move this through expeditiously. They're pointing to the swift
confirmation process of the most recent Justice put on the Supreme Court, Amy Coney Barrett, from the time that she was nominated to the time she was
confirmed was a mere four weeks.
So Alison, Democrats are looking to put it on that timeline. They can have these hearings. They can vote for a nominee, even before the term is ended,
and then that nominee wouldn't take over until the end of the term.
So there is a lot of time here for Democrats to act. They do have that very slim majority in Congress to move this forward and this would be a
significant win for President Joe Biden as he has been struggling over the past few weeks with the political realities of his presidency. This could
maybe turn the tide get voters, in particular black voters on his side since he has pledged to nominate the first -- what would be the first black
female Justice.
So a lot -- the tide has definitely turned here for the Biden presidency -- Alison.
KOSIK: Okay, justice correspondent, Jessica Schneider, thanks so much.
[15:25:01]
The Winter Olympics in Beijing kickoff one week from Friday and big corporate sponsors have spent billions on promotions and events, but many
governments around the world have joined a diplomatic boycott of the Games over China's treatment of minority groups. So sponsors are laying low.
CNN's Selina Wang reports from Tokyo.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice over): Beijing is gearing up for the biggest show on Earth, but the lead up for sponsors of the Winter Olympics
has been quiet. Foreign brands are caught in the middle of diplomatic boycotts from outside China, in fear of retaliation by the Chinese
government and consumers.
DIPANJAN CHATTERJEE, VICE PRESIDENT AND PRINCIPAL ANALYST, FORRESTER: Whereas you would expect brands to sort of beat their chests and come out strong. Instead, what you found is that they retreated into their
shells.
WANG (voice over): Some of the largest Olympic sponsors like Airbnb, Coca- Cola, Intel, Procter & Gamble, and Visa have collectively spent billions to be a part of what's normally a marketing bonanza.
MARK DIMASSIMO, FOUNDER, DIMASSIMO GOLDSTEIN: They're being much more pragmatic advertisers sticking with their evergreen themes. No one wants to
be seen as a sponsor of human rights abuses.
WANG (voice over): The muted global campaigns have focused on athletes with little mention of Beijing.
CHATTERJEE: They have paid top dollars to be associated with this incredible equity of the Olympics, and now, they find themselves having to
backtrack.
WANG (voice over): While it's all quiet outside China, inside China, the sponsors are seizing the Olympic opportunity. Over Christmas, Coca-Cola had
an online campaign to send free Olympic memorabilia to Chinese consumers showing off an interactive exhibition at the Zhengzhou Train Station.
Visa creating an emotional video 100 days before the Games. Procter & Gamble unveiling a beauty salon for athletes in the Olympic Village.
WANG (on camera): But there's growing pressure from Washington and rights groups on these giant corporations to take a stand on China's human rights
record. The Biden administration and other U.S. allies will not send government officials to the Winter Olympics as a statement against
allegations of genocide in China's Xinjiang region, allegations that China strongly denies.
WANG (voice over): But industry analysts say the priority of many Olympic sponsors for these Games is to keep and grow their market share in China
because retaliation can be swift and painful.
CNN has reached out to all of the top Olympic sponsors, most have either declined to comment or not responded. France base Atos said, "We fully
abide by the IOC's strategy on human rights in addition to our own ethics and compliance program."
Switzerland based Omega and Germany based Allianz said their focus is on the athletes, Allianz adding; "We consider dialogue with civil society
organizations to be very important and regularly exchange in our NGO dialogue on socio-political issues."
RICK BURTON, SPORTS MANAGEMENT PROFESSOR, SYRACUSE UNIVERSITY: They're all very cautious right now to not do something that could be perceived as
insulting the Chinese government or the Chinese people.
WANG (voice over): And last year Nike, H&M, and other Western brands faced a boycott in China because of a stand they took against the alleged use of
forced labor in Xinjiang, then in 2019, comments made by then Houston Rockets GM in support of Hong Kong pro-democracy protests almost ended a
multibillion dollar deal between the NBA and China.
So for these Olympics, sponsors are likely to play it safe.
Selina Wang, CNN, Tokyo.
(END VIDEOTAPE)
KOSIK: Growing anger, steady defiance. The British Prime Minister was grilled in Parliament today. We'll discuss his response to the growing
calls to resign.
(COMMERCIAL BREAK)
[15:30:00] (MUSIC PLAYING)
KOSIK: Welcome back.
Boris Johnson is rejecting growing calls to resign, despite a police investigation into whether Downing Street parties broke England's lockdown
rules. The British prime minister told Parliament today he is waiting for the result of an independent investigation, led by Sue Gray, a top civil
servant.
She's looking into reports of various parties held in Johnson's Downing Street's office and gardens. The London Metropolitan Police opened its own
probe on Tuesday. Even so, Mr. Johnson went on the offensive against the opposition leader, Keir Starmer.
(BEGIN VIDEO CLIP)
KEIR STARMER, U.K. LABOUR LEADER: Since he acknowledges the ministry of code applies to him, will he now resign?
BORIS JOHNSON, U.K. PRIME MINISTER: No, Mr. Speaker. He would have kept us in lockdown in the summer, Mr. Speaker. He would have taken us back into
lockdown at Christmas, Ms. Speaker.
And it's precisely because we didn't listen to Captain Hindsight that we have the fastest growing economy in the G7, Mr. Speaker, and we have gotten
all the big calls right.
(END VIDEO CLIP)
KOSIK: About two-thirds of Britons say they want Boris Johnson to resign. Many of them are angry the prime minister allegedly broke COVID rules while
average citizens were forced to make extraordinary personal sacrifices. Salma Abdelaziz spoke to some of them.
(BEGIN VIDEOTAPE)
SALMA ABDELAZIZ, CNN CORRESPONDENT: Alison, many in the British government waiting with bated breath for the release of that Sue Gray report, one of
two investigations looking at multiple allegations of parties taking place inside Downing Street across the course of two years and multiple
lockdowns.
That Gray report, of course, led by a senior civil servant, is supposed to provide a blow by blow, a timeline of what occurred inside Downing Street
and quite crucially, what Prime Minister Boris Johnson knew or did not know.
But many members of the British public are outraged at this growing Partygate scandal because of the sacrifices they made to follow the rules.
(BEGIN VIDEOTAPE)
ABDELAZIZ (voice-over): Spring 2020: about two months into England's strict nationwide lockdown. The death toll mounting so quickly, mass graves
are dug on the outskirts of London.
JOHNSON: To obey those rules...
ABDELAZIZ (voice-over): The prime minister consistently urges the public to abide by COVID restrictions.
May 15th: this photo is snapped in the Downing Street garden, Johnson allegedly hosting a wine and cheese party for his team. Johnson's
government has denied wrongdoing, claiming this was a work meeting.
Bereaved mother Emma Jones says it's hypocrisy.
EMMA JONES, BEREAVED MOTHER: The date just jumped out at me. So the 15th of May 2020, which is an incredibly sad day for us.
ABDELAZIZ (voice-over): That day, her 18 year-old daughter, Ruby, died of blood cancer at home.
JONES: After Ruby died, we opened up our front garden and invited people to come. But they had to do in their household bubbles.
ABDELAZIZ (voice-over): Because funeral attendance was severely limited, this is how loved ones said goodbye to Ruby.
[15:35:00]
You made the sacrifice of not having a funeral for your daughter.
JONES: It was very, very hard. But we didn't begrudge that. But now to realize that the people who set the rules weren't following them is
absolutely infuriating.
UNIDENTIFIED MALE: But this government needs to stop --
ABDELAZIZ (voice-over): May 20th, 2020, police are out to enforce restrictions and break up illegal gatherings.
UNIDENTIFIED MALE: We need to disperse this group and go about your business.
ABDELAZIZ (voice-over): But in the prime minister's garden, a party is allegedly taking place, after his top secretary invited more than 100
staffers to "make the most of the lovely weather" and "bring your own booze."
Johnson now admits to his attendance and has apologized but says he believed the BYOB event was a work function.
JOHNSON: Mr. Speaker, I want to apologize.
ABDELAZIZ (voice-over): That spring, Olufemi Akinnola followed the rules until his dying breath, isolating at home, his son, Lobby, told us.
LOBBY AKINNOLA, OLUFEMI'S SON: You have someone who was so dedicated to the people he loves. And then the prime minister just doesn't care?
ABDELAZIZ (voice-over): In the fall of 2020, Lobby met the prime minister with other bereaved families to share his story of grief.
AKINNOLA: I don't think the man can maintain his position as prime minister because I think he's betrayed us all so deeply.
ABDELAZIZ (voice-over): For many, the accusation their government broke COVID-19 rules to party is unforgivable. The inquiries into the alleged
breaches, first by the cabinet office and now the police, are set to make it unforgettable.
(END VIDEOTAPE)
ABDELAZIZ: Alison, it's sometimes hard to capture the mood in this country. It's oscillated between heartbreak and outrage and sometimes that
very dark British humor that gets people through the toughest times here.
But it's that question that people are asking each other.
Where were you on the day of that alleged party?
That really has grown the anger, the public sentiment, that this government simply does not follow the very rules they set for the public -- Alison.
KOSIK: OK, Salma Abdelaziz, thank you so much.
The rules Boris Johnson set and is accused of breaking had a tremendous impact on business. Here's a list of some of those parties and gatherings
and the dates they allegedly took place.
In May, 2020, no more than two people were allowed to meet outside.
London was in tier 3 restrictions on December 18th, when Downing Street staff are said to have held a Christmas party. That meant people were not
allowed to meet socially indoors, in a private garden, or most outdoor public venues with anybody they do not live with or have a support bubble
with.
My next guest has been publicly critical of the impact of COVID lockdowns. Rod Humphris is owner of The Raven pub in Bath, Southwest England, and he
joins us via Skype.
Great to have you on the show.
ROD HUMPHRIS, OWNER, THE RAVEN: Hi, Alison, happy to be here.
KOSIK: So I want to first get your opinion about the lockdown restrictions that were put in place at the height of the pandemic, the ones that
impacted business. These lockdowns were put in place because there was the virus raging and this meant, you know, trying to save lives.
Why were these restrictions overdone if it was about saving lives?
HUMPHRIS: I think we all know now and many of us have known for a long time that the virus does what the virus does and all these restrictions
have no effect.
We have other countries around the world who haven't done them. You have some of your states in the U.S. who haven't done them and the outcomes have
been the same or better. So essentially, lockdowns are and always have been a lie.
KOSIK: How can you say they're a lie, though?
The point of them is to, let's say, keep -- I understand you owned -- you have your pub, the point is not to crowd people in a pub, where they're
talking loudly and spreading potentially a deadly virus.
HUMPHRIS: What, a bit like the parties in 10 Downing Street, perhaps?
They obviously knew it was a lie. If there's a deadly virus about, you don't go to parties. You don't have parties. While they were telling us to
obey these stupid rules, they obviously knew themselves that they were lying.
KOSIK: OK, so let's go to the prime minister's crisis now.
So if you had a chance to sit across the table from Boris Johnson and, you know, have a pint together, what would you say to him about these Downing
Street parties?
[15:40:00]
HUMPHRIS: Oh, I would tell him what an offense it is to us that he has called -- caused untold suffering and unnecessary death by what he's done.
I would like to know why he's done it. I have no idea. And I would like to tell him that I believe that we need a serious criminal inquiry and that I
hope he is going to prison for what he has done.
KOSIK: And some would ask, should the prime minister be put out to pasture before the local elections this May?
HUMPHRIS: I -- what happens to him politically, I don't personally care about and I suspect those around him, most of whom have banged the lockdown
drum, try to force vaccines and vaccine mandates on them, like Sajid Javid, they have all stood by and watched. And they must have known. So I don't
think there's a good one there.
KOSIK: All right.
HUMPHRIS: Might even be the least (INAUDIBLE).
KOSIK: All right. Rod Humphris, thank you so much for your time tonight.
HUMPHRIS: You're welcome, thank you.
KOSIK: And that's QUEST MEANS BUSINESS, I'll be back at the top of the hour as we make a dash for the closing bell. Up next, "MARKETPLACE EUROPE."
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[15:59:34]
KOSIK: Hello, I'm Alison Kosik, it's the dash to the closing bell and we're just two minutes away. It's another roller coaster kind of day on
Wall Street. The Dow swung about 500 points and turned negative on Jerome Powell's comments on inflation.
The Fed chair warned, higher prices were spreading beyond sectors directly tied to pandemic disruptions and rates could rise even faster than markets
expect.
All the major averages had turned negative by the time Powell wrapped up. The Nasdaq is continuing its slide into correction territory, although it's
turned a little green right now.
That's your dash to the bell. Follow me on Instagram and Twitter @AlisonKosik and the bell is ringing on Wall Street. "AMANPOUR" starts now.
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