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Quest Means Business

Biden: Fighting Inflation Is Number One Priority; Central Banks Weigh How Fast To Raise Rates To Slow Inflation; Commander At Steel Plant Reports Heavy Overnight Shelling; Harley-Davidson's "Livewire" Launches New E-Motorcycle; Dash To The Bell. Aired 3-4p ET

Aired May 10, 2022 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:14]

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: There is an hour to go before trading ends, and over the last couple of days, well you'd be quite right

if -- you're reasonable if you're holding your hat, and that shows the day, volatility.

Admittedly, the gains and the losses -- well, the loss -- the gains were big to start with, but the movements are not huge, but it's this volatility

bouncing around zero that we need to sort of investigate and discuss today, because the markets are uncertain betwixt and between, and the main event

shows the reasons why.

President Biden pledging to do all he can to stop inflation, and he has told America, it's his top priority.

Ukraine says Russia has fired hypersonic missiles on the port city of Odessa.

And Elon Musk tells us, if he is in charge of Twitter, he will lift former President Trump's permanent ban.

We are live in New York. It's Tuesday. It is May the 10th. I'm Richard Quest, and I mean business.

Good evening.

President Biden today says he is making tackling inflation his number one priority. The anxiety over rising prices is growing across the United

States, as well, of course as in many parts of Europe and beyond.

But in the United States, the President admitted lowering prices won't be easy. He reminded us the pandemic and Russia's war in Ukraine have created

what he calls an extremely complicated economic situation, and he is confident the Fed can do its job taming inflation.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: I believe that inflation is our top economic challenge right now. I think they do, too. I built a

strong -- we built a strong economy with a strong job market, and I agree with what Chairman Powell said last week that the number one threat is the

strength -- and that strength that we built is inflation.

So the Fed should do its job and it will do its job, I'm convinced with that in mind.

(END VIDEO CLIP)

QUEST: Well, what he said. How did the markets react? Little to ease the investors' fears. There you are. You see them, you can't really tell when

he spoke and when he didn't.

The 500-point rally this morning on the back of very sharp losses yesterday has evaporated. We are back above the parapet, barely holding. I suspect it

will stay like that for most of the hour, unless there is a late selloff, which is entirely possible.

CNN's John Harwood is in Washington with the politics. Rahel Solomon is with me in New York with the markets. Start with you, John Harwood.

I mean, there's not -- this isn't a question, it is a statement. There is not much you can do. Inflation is the purview of the Fed. It's a cake

that's baked, but the political ramifications for him are enormous.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Huge political ramifications, and when he says it's my top priority, that is another way of saying that

it's his top political vulnerability.

It's a huge problem for the American people because it touches everyone, unlike unemployment, when the unemployment rate rises, there's a relatively

modest number of people who lose their jobs. But when inflation rages as it is now, it affects everyone in the country and we haven't been dealing with

this for well over 30 years.

So it is a new problem, one that Americans are feeling and he has got to -- if he can't solve it, which he can, the Federal Reserve has the principal

responsibility, he has to at least take the small steps that he can and be seen by the American people to be taking those steps.

He also today attacked Republicans. So, all of this is the way he politically is responding to an issue that he can't control in a

substantive way.

QUEST: But Rahel, the markets, Rahel, the markets told us what today?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: You know, the markets told us more of the same, which is more volatility. We didn't really see much of a

bounce after we heard from President Biden because perhaps we didn't hear much new. It could perhaps be a complicated economic situation, but it is

not complicated. When you head to the gas pumps or when you head to the grocery stores. Inflation, everybody is feeling it.

But what is complicated, Richard is how do you fight inflation without perhaps tipping the economy into a recession? Morgan Stanley puts the odds

at 21 percent, not great odds, and the President knows it.

QUEST: Okay, but Rahel, the consensus is what on Wall Street? I mean, if there is a consensus, Rahel, on recession or not?

[15:05:03]

SOLOMON: Well, it really depends on who you're asking. I mean, what I see as base case is still not a recession. That it is still not inevitable that

we have to experience a recession. But again, the odds are very slim that the Federal Reserve and the President of the Federal Reserve more so can

raise rates without tipping us into an inflation or a recession rather, so odds are not great, but it doesn't mean that it's inevitable, a recession.

QUEST: John Harwood, I don't want to date either of us. But we both remember, we both Remember, "It's the economy, stupid." 1992, James

Carville, the Clinton campaign. Joe Biden will find it incredibly difficult facing an electorate. I mean, the recession won't be here by them, by the

way, that's not going to come until next year from the rates, but the slowdown will be felt by November.

HARWOOD: I hate to tell you, Richard, I'm going to date myself even more, Jimmy Carter was President the last time we had inflation as high as we're

dealing with right now, and he paid the price, he lost his re-election bid to Ronald Reagan.

Ronald Reagan was President early in the attempt to curb inflation. There was a significant recession, he had losses in his first midterm election.

But then he was very strong politically after that.

Look, every President with two exceptions of the last hundred years has lost ground in midterm elections. So, the odds are heavily favoring

Republicans right now to make gains, to probably take the House of Representatives, perhaps take the Senate and what Joe Biden is trying to do

is look for a political message that will fend that off.

And what he has tried to do is grab on to some ideas that a Republican Senator, Rick Scott, he is running their Senate Campaign Committee has

thrown out there about making everyone pay Federal taxes, who doesn't already pay them. That's half the American people who don't make enough

money to owe Federal income taxes right now.

So Joe Biden was attacking that today, saying he wants to raise taxes on half the country. So, that's not a bad rejoinder, but ultimately, the

President needs for inflation to come under control. We'll get the new CPI number tomorrow.

And some economists thinks we are peaking and about to see that decline toward the end of the year, maybe in the three to four percent range. If

that happens, Joe Biden is going to be healthier than he is today.

QUEST: To both of you --

SOLOMON: Richard, just one thing I want to point out just in terms of messaging really quickly, you know, we even heard last week from Fed Powell

-- Fed Chair Powell essentially beginning his press conference with a direct message to Americans that he and the Federal Reserve understand the

hardship that inflation is causing.

So the messaging clearly very clear that it's a problem. What you're not hearing from Fed Chair Powell anymore, is the word "transitory" how he had

described inflation last year, certainly no more of that talk.

QUEST: Absolutely. He shouldn't have kept it there for so long, anyway, many say.

All right, John, thank you; and Rahel. Both sides, the political and the economic, the markets and the President of the New York Fed says the Fed

can pull off a soft landing for the U.S. economy. Note, I say "can." A half point rate rise last week part of the series of hikes planned.

In the E.U., rates remain unchanged, but calls are growing for the E.C.B. to start raising rates as early probably as July according to the president

of Germany's Bundesbank, he says he believes that rate rise should be sooner rather than later. He speculates July.

Shamik Dhar is the chief economist for BNY Mellon Investment Management, he is with me from Surrey.

Here we go. Look, the BoE is at four, the U.S. is at two, the E.C.B. will have a couple probably before the end of the year, but this complexity of

dealing with inflation at a time of weakness, stagflation, do you see recession?

SHAMIK DHAR, CHIEF ECONOMIST, BNY MELLON INVESTMENT MANAGEMENT: I think we're getting there. I think we're getting close. I think there is a sense

in which the chickens may be coming home to roost.

Lots of people argue about whether the Fed is about to make a policy error. I think the policy error has already been made, essentially. You know, we

left policy too easy for too long. And at least part of the inflation that we're seeing now is that.

And I don't know if we're there yet, but it is looking increasingly like we'll have to generate a really sharp slowdown in order to get inflation

back under control.

QUEST: The problem is, the events driving it are not your classic demand led boom, in a sense, you've got the supply chain issues X China, well,

there is not much you can do. And you've got the war, and that could last, God forbid longer, but that puts pressure.

So you know, explain to me, the raising of rates will cure inflation, but it won't cure the problem that's caused it.

[15:10:04]

DHAR: That that's true to some extent, I think, Richard. I mean, certainly there are big supply, what you call supply influences on inflation. At the

moment, the supply chain breakdown, you know, the state of the labor market in the U.S., et cetera et cetera.

However, I'd quibble a little bit. I'd say, actually, a lot -- you know, a bigger part of the inflation than most people are talking about is down to

what I just described, the fact that rates were left too low for too long, and there was too much we had done. And so some of it is actually demanded.

If you look at nominal spending in the U.S., it's way high, it's way high.

QUEST: So in your view, does -- and Central Bankers hate it when we use the phrase tightening. They talk about merely returning rates to normality or

neutrality. Will the raising of rates to a neutral level or normal level, will that be sufficient to -- because, coming from such a low base to

squeeze out the inflation or will we have to go beyond and actually tighten?

DHAR: I don't think neutral is nearly enough to be honest. I think, we'll have to go into positive territory. You know, positive, you know,

tightening territory, you say they don't want to use the word, but that's essentially where they're going to have to go.

And, you know, for that reason, you know, it seems to me there are potentially surprises ahead still for the bond and equity market simply

because, you know, there's quite a lot of tightening to be done, three percent or thereabouts may not be enough.

QUEST: You see, three percent arguably would take you to neutrality depending on what your definition is, but can you see rates going to four,

four and a half?

DHAR: It's a difficult call. I think neutral is probably around between two and a half and three. I think, I suspect they'll have to go to roughly one

percent higher than that. So three and a half is definitely in play. Do I discount four or even slightly higher than four? Absolutely not, because

we've had so many surprises recently. I think we have to keep that in mind.

QUEST: So Shamik, what happens though, if -- what happens if the economic situation worsens, because of folks say for example, God forbid the war in

Ukraine gets worse or China has a greater slowdown. If you are then balancing the risks and do you delay your -- do you basically live with the

inflation because if you deal with the inflation whilst the worsening, you get wider economic -- then you've got you've got a great recession.

DHAR: I mean, possibly, but you know that really bucks the trend, you know what Central Banks have been saying they do for the past 25-plus years.

They target inflation. Right?

And, you know, the fact is, they haven't really been tested in this way for quite some time. And so I think the proof of the pudding will be in the

meeting, if you know, we do have to generate a significant slowdown, and if we do have to push rates into significantly positive territory, well,

tightening territory, will they be prepared to push through?

At the moment from the rhetoric, I suspect they will. I sounded a little bit alarmist. I'm not -- I don't mean to sound too alarmist. I think you

know, there is still potential for things to slow down of its own accord but you know, the longer time goes by and we get these inflation surprises

to the upside, the more worried I am about that kind of scenario.

QUEST: Shamik, good to have you on the program. We will talk a lot more over the next weeks and months as we understand this. I'm grateful for you

tonight for your commonsense and explanation. Thank you.

It is QUEST MEANS BUSINESS with you. Ukraine is accusing Russia of using hypersonic missiles in a devastating strike on a hotel and a shopping mall.

It was in the port of Odessa. We will report from there after the break.

(COMMERCIAL BREAK)

[15:16:32]

QUEST: The Ukrainian port of Odessa is the country's latest scene of devastation and Ukraine says this damage was caused by hypersonic Russian

missiles. Look at the scale and the size of the devastation and destruction.

It was two hotels and a shopping mall, and they were the civilian targets that were leveled by the heavy overnight bombardment. Go further east in

Mariupol and the Ukrainian commander of troops inside the Azovstal steel plant says many of them are badly wounded after relentless shelling last

night.

Scott McLean is with me. We're going to start with these Odessa missiles and this hypersonic. Explain

SCOTT MCLEAN, CNN CORRESPONDENT: Richard, yes, look, Odessa has been a scary place over the last couple of weeks the Russians have been doing

missile strikes relentlessly really and city officials were very much expecting the city to be hit over the May 9th Victory Day in Russia and

that is frankly exactly what they got, with strikes up and down the Black Sea coast of Odessa, not even a visit from a European dignitary could stop

the missile strikes.

(BEGIN VIDEOTAPE)

MCLEAN (voice over): As darkness falls in Odessa, firefighters race to control the flames at a shopping mall in the northern part of the city

after the Ukrainian military says it was hit by seven missiles.

The sprawling shopping center, one of the largest in Southern Ukraine and home to many well-known international stores was closed at the time because

of a government imposed curfew in effect all day Monday. It's not clear why it was targeted.

Sunrise Tuesday morning shows the flames extinguished and the sheer scale of the damage. Military officials also say one missile started fires at

three warehouses, torching more than 1,200 square meters and causing extensive damage.

This is what's left of a seaside luxury hotel complex called the Grand Pettine, which used to be frequented by Russian elites and is still owned

by a pro-Russian businessman. Officials said no one was killed or injured. It was one of two hotels hit.

The second struck south of the city in the seaside village of Zatoka, not far from an important bridge that has been hit several times in recent

weeks, the only road or rail connection between the southwest corner of Ukraine and the rest of the country.

All of this coming just as European Council President Charles Michel was in the city meeting with the Ukrainian Prime Minister.

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): Despite the visit of the President of the European Council, Russian troops launched a

missile strike on the Odessa region. This is Russia's true attitude towards Europe, and it has always been like this, irrespective of the rhetoric in

Moscow.

MCLEAN (voice over): Odessa has been a frequent target of Russian missiles in recent weeks, mostly hitting infrastructure, but now increasingly

terrorizing residential areas, too.

GENNADIY TRUKHANOV, ODESSA MAYOR (through translator): We worked all night to provide assistance for the people, all our units. Now, housing and

communal services count the number of affected apartments, we will provide help.

MCLEAN (voice over): Unclear just what the Russians are trying to achieve here, beyond sowing fear among the civilian population.

(END VIDEOTAPE)

[15:20:03]

MCLEAN (on camera): So according to a European official, Charles Michel actually had to pause that meeting with the Prime Minister so that they

could seek shelter during these missile strikes.

Richard, you mentioned off the top of these Kinzhal missiles, it is only the second time that the Russians have used those missiles. The Ukrainian

say that three missiles were fired at Odessa just yesterday. Now, there's plenty of debate as to just how significant this is. There is no doubt that

these missiles are bigger. There's a bigger payload, they have a longer range, but if you ask U.S. Defense Secretary Lloyd Austin, it's not exactly

a game changer.

QUEST: Scott McLean, who is live for us this evening. Thank you, sir.

Ukraine says it will suspend the flow of Russian gas to a key transit point of the country's east. It says Russian troops occupying the area have

hampered operations. About a third of Europe's Russian gas imports flow through the station.

Now, the war's threat to Europe's energy securities, the country is looking for other suppliers. Ramping up production is Trinidad and Tobago, the

nation's largest natural gas producer in the Caribbean. Before the pandemic, it was the world's eighth biggest LNG exporter, according to BP.

The government expects output to return to pre-pandemic levels by next year. Stuart Young is the Energy Minister of Trinidad and Tobago. He is

with me now.

Minister, I am grateful that you're with me. I was listening, you know, I saw the G7 the other day and read the statement and I saw that how cutting

off or weaning off Russian oil and gas would require extra from everybody else. How can Trinidad and Tobago help Europe or anybody indeed by

producing more?

STUART YOUNG, ENERGY MINISTER OF TRINIDAD AND TOBAGO: Thank you very much, Mr. Quest. It is indeed a pleasure and a privileged to be here with you on

this international audience today.

Trinidad and Tobago is a twin island state. We are the southernmost Caribbean islands in the Caribbean, and we're only about 5,100 square

kilometers.

How can we contribute? We're looking on this international crisis taking place, and as you said, we see ourselves as punching way above our belt. We

have been a significant gas producer, LNG producer, for the last few decades.

At our height of production, we were pumping out about 770 million MMBtu of LNG a year on an annual basis. We have four trillion, so we see the

ability, we have additional capacity right now, Richard, and we are eager to step in to assist in what is going on globally, in whatever way we can.

It's not only on the LNG front, but we are also a significant ammonia producer in Trinidad as well, ammonia and methanol and we have capacity

there as well.

So as a gas producer and someone who turns gas into both LNG as well as what we call pet chems, and ammonia, methanol urea, UAN, we are ready to do

what we can to assist with what we see as this crisis taking place.

QUEST: And also internally within the country, the increased price that we're now seeing for both gas and for oil, must -- I mean, you know, it is

an ill wind that blows, no good, I suppose. But you must be doing better as a result of your energy export.

YOUNG: Well, we certainly are. I heard you talk about pre pandemic stages, we've gone through yet another cycle coming out of the difficulties of the

early stages of the pandemic. And yes, we are seeing income increase as a result, especially on the LNG side as well as the ammonia side of pricing.

As you know it, ammonia prices, they've climbed from around 180 U.S. dollars a metric ton, they're now hovering around 1,400 U.S. dollars a

metric ton. So there is a significant increase in revenue to these companies et cetera, and we will see some in our coffers as well.

QUEST: What are you going to do with it? I mean, what are you going to do - - you know, I mean, to the extent that the windfall that you are drawing is tremendous amounts of revenue?

YOUNG: Well, Richard, I wouldn't put it as tremendous amounts of revenue. You know, as a government, what you're doing is you're really making those

revenue increases off of taxation, so you wait for it to come in, but as a government, just coming out of a very difficult time with the pandemic, you

have bills, too. We'll be paying our bills. We survived the early stages of the pandemic.

The government revenue is used to look after approximately 1.4 million people here in Trinidad and Tobago, who quite frankly, have quite a good

life. So we will be spending it on our education, which we've spent billions on in terms of our currency and just other things that are

necessary for the people of Trinidad and Tobago.

[15:25:05]

QUEST: Finally, let's get to the issue of how in your view does the world wean itself off Russian oil and gas? I mean, we could have a long

discussion about was Europe foolish for not weaning itself earlier, post the annexation of Crimea in 2014, but we are where we are. And the

difficulty now for Germany, for Italy, for the Netherlands, for all these other countries, Hungary.

Hungary says to withdraw Russian oil and gas will be like hitting the economy with an atom bomb.

YOUNG: What you have to look at is globally, what other countries can help contribute by ramping up production. So that's where we want to come in and

assist. But, generally, Richard, there is another conversation taking place with respect to weaning yourself off of gas. We see it as completely

different.

So there is a whole renewable conversation, which we're in support of, but we see gas as the cleanest hydrocarbon fossil fuel and we actually think

gas is going to be around for decades.

So for example, in Trinidad 99.9 percent of our electricity needs are derived from the natural gas that we produce. So, how does the rest of the

world, in particular, Europe, deal with this current crisis? You have to look at where there is alternative supply of natural gas, and here,

Trinidad and Tobago is one of those places.

QUEST: Minister, very grateful for you tonight, a different perspective on this. Actually, I'll be quite honest, I had no idea really that T&T was

such a vastly a huge -- well, such a big player in this and I'm delighted that we've covered it tonight.

We all learn something new every day, sir, I'm grateful. Thank you.

As we continue, it is QUEST MEANS BUSINESS. Elon Musk has confirmed one of the changes he would bring to Twitter. If he is CEO, he would reverse

Donald Trump's permanent ban. That raises all sorts of questions, which we'll deal with in a moment.

(COMMERCIAL BREAK)

[15:30:00]

(MUSIC PLAYING)

QUEST: Elon Musk says he will welcome Donald Trump back to Twitter if he buys the company. Twitter banned the former president after the U.S.

Capitol riots last year. Twitter said Trump used his account to incite violence. Elon Musk, speaking at a conference, said that ban deepened

political divisions in the U.S.

(BEGIN VIDEO CLIP)

ELON MUSK, CEO, TESLA AND SPACEX: I would reverse the ban. Obviously, I'm not on Twitter yet. So this is not like a thing that will definitely

happen, because what if I don't own Twitter?

But my opinion, and Jack Dorsey, the owner shares this opinion, is that we should not have permanent bans. That doesn't mean that somebody gets to say

whatever they want to say.

If they say something that is illegal or otherwise just, you know, destructive to the world, there should be a timeout, a temporary suspension

or that particular tweet should be made invisible or have very limited traction.

(END VIDEO CLIP)

QUEST: Brian Stelter is with me.

Brian, as I listened to Musk, I sort of thought, oh, my goodness, this is exactly the problem he's going to face.

What are the rules of the new -- or the new rules of the road in these cases?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: And who decides?

Is it going to be up to Musk personally to decide whether a tweet is destructive for the world?

That's basically the rubric he just used. He said illegal or destructive.

Well, illegal, at least you can apply the law.

But is he going to decide what tweets are destructive?

And is he going to decide that Donald Trump is posting destructive messages and he should have a timeout or a temporary ban?

We start to see how complicated this is. And dare I say, Richard, it actually gives me a little bit of sympathy for the executives at these

companies. They are very well paid but they have very difficult decisions they make on a daily basis.

Most of them are not high profile cases like Trump. Most of these are much lower profile. But Musk is going to be in charge of a lot of this. As he

said. if the deal goes through.

It was notable that he made that comment about himself, if he actually takes over Twitter. Some investors, some owners of the stock still don't

believe it because the stock is trading lower than his offer price.

But if it does go through, it will be on him. Now we know he will reinstate Trump.

But who's going to enforce all the rest of the rules?

QUEST: And we saw this very clearly with Facebook, which has taken the exact opposite point of view. It set up almost a court of arbitration with

the great and the good, that have produced long results and decisions that can be used as precedence and quoted. What I'm hearing here is, well, I

think it feels a bit destructive.

STELTER: Right, let's make a tweet invisible because it's not good for the world. He also says that he fundamentally believes permanent bans cause a

lack of trust.

I think he does have a fair point about that. This idea that a company can just decide, on its own, privately, to ban someone forever, probably does

contribute to a loss of trust. But the alternative is very messy.

I guess, the point is, billionaires are like the rest of us. Even Elon Musk does not have a well-thought-out answer to these questions. Whether he is

thinking about it as he does on stage, at the conference today, tweeting his way through it, as he tries to take over Twitter.

Whether it's as good for Donald Trump or not is also going to be in question. So Trump will be allowed to be tweeting again. We will see if he

will join or not. I assume he will. I'm not sure it's good for Donald Trump to be back on Twitter -- but that's a political calculation.

QUEST: What's interesting, he said Jack Dorsey agrees with him. Hang on a second, if Jack Dorsey agrees with me, he could easily have reinstated

Donald Trump.

STELTER: That is correct. I also wonder if Jack Dorsey is now going to be the shadow CEO.

Is he going to be coming back in some fashion?

He is talking with Musk through these issues. That is intriguing.

QUEST: You'll have enough work to keep you busy for years.

STELTER: I'll get back to it.

QUEST: Thank you, sir.

So have a listen to this sound. It's Harley-Davidson's new electric hog.

(BEGIN VIDEO CLIP)

(MUSIC PLAYING)

QUEST (voice-over): Now the company's new bike launched today. It's got a different noise to the muscle that gave the company its cult following.

(END VIDEO CLIP)

[15:35:00]

QUEST: This is what that was.

(BEGIN VIDEO CLIP)

QUEST (voice-over): All right, now. We can debate until the cows come home about which is better.

(END VIDEO CLIP)

QUEST: The shares are up more than 1.75 percent. However, profits went down, squeezed by supply chain issues and all the problems you can imagine.

The company said its bikes remained in high demand. That was revenue.

Jochen Zeitz is the chief executive, the CEO at Harley-Davidson. He joins me.

Sir, we will get to the noise in a moment. Let's deal with the business side first. I look at what the problems you face, everything from the

tariffs, the way through to supply chain issues, current issues, to inflation, to energy costs. You've got them all on your plate.

What's worrying you most?

JOCHEN ZEITZ, CEO, HARLEY-DAVIDSON: Well, I'm not a guy that likes to worry too much. We have a great strategy and we're really focusing on the

execution. This is a fantastic brand. We are now standing up the second brand with LiveWire that that is going public sometime in June at the New

York Stock Exchange.

So a lot of exciting things happening, despite the bank job, which is certainly challenging.

QUEST: Do you think you will still go public in June?

The SPAC method is slowly going out of flavor as long as the market is in such turmoil. I don't expect you to necessarily tell me what you're going

to do.

But are you rethinking that plan to float and SPAC in June?

ZEITZ: No, we are not rethinking it. And we are doing this for the right reasons. LiveWire is a fantastic new brand. It's built on the lineage of

Harley-Davidson. We want to set it off as a separate entity, a separate company, that is independent, with an independent board. And we see a great

trade opportunity.

We launched our new bike today, the Del Mar. And before the presentation was over, we sold our limited edition within 18 minutes. There was a strong

demand and we sold 100 bikes that are going to deliver next year. So there's definitely demand out there.

And we believe that a pure electric play, that can lead the industry, is something that the market wants. And that we will give to the market and we

will be the ones that shape the electric two-wheel space in the future.

QUEST: How important was it -- I mean, obviously the performance is crucial and is the number one aspect -- but how important was it, things like the

noise?

Which is a lot more difficult to do without a combustion engine, but to create that vroom feel.

ZEITZ: Sounds a little different in reality. But I think there is space for both. We believe that the ice market, the combustion market will continue

to grow throughout 2030. But there's also a new consumer out there, a more conscious consumer in the middleweight segment that we want to inject with

the LiveWire brand and product.

If you look at the Del Mar product we just launched, it weighs 435 pounds. It accelerates from 0 to 60 in about three seconds. It has a range of about

100 miles. So it's the perfect bike for the city, very agile and, in a way, different sounding.

But that's the whole idea. You want to differentiate your product, offering what we can do better with two distinctly different brands. They all have a

fantastic personality. And they are part of the same family.

QUEST: What do you do with the original brand, as we move toward decarbonization, greater -- as more rules, basically, more countries,

basically, ban the combustion engine in the future?

I will grant you, we are a long way off that yet. But as you plan down that road, what do you do?

ZEITZ: We have a clear strategy in place that we presented today. LiveWire with spare head electrification of the two-wheel space and how they will

certainly follow at the right time. But we need -- the technology needs to be at a place where we can actually electrify the core segments of Harley-

Davidson.

That is not the case today. But we have a game plan that also will electrify Harley in the long term future. But that is certainly a long ways

out in comparison. Until then, we will also, as Harley-Davidson, benefit from all the developments that LiveWire is doing and the other way around.

So it's really a win-win situation by having two different companies, two different brands, that benefit from each other.

QUEST: Sir, Jochen, good to have you on the program, sir. Very fascinating to hear the strategy and the way forward. I'm very grateful to you.

I want to pause and look at the markets. We do need to get under the hood, if you will, of the market. We're going down a little bit, roughly 133.

[15:40:00]

QUEST: We were off much more earlier in the session. We started off with gains of over 500, which is not surprising, off the back of the falls over

the last few days. But now we are giving some of those.

The triple stack shows that there is a divergence. The Dow is going down. The Nasdaq has given back some of its gains. It was about 1.6, 1.7. So

given back some of its gains. The S&P could easily turn negative before the day is over.

And the 30 will show you exactly why the Dow is going down harder and faster because the big numbers are there, look at that. Goldman Cap, Home

Depot. And the worst is IBM, down 4.5 percent.

The banks, JPMorgan Chase. So all the financials are yanking it down. And yet tech is having a better day. Not surprise, to me frankly, honest. Tech

was so badly beaten up through the Nasdaq over the last couple of days that I'm not surprised that we are seeing a resurgence in tech, particularly

Apple at 1.6.

So that's QUEST MEANS BUSINESS for the moment. You and I will dash to the bell in about 15 to 20 minutes' time. For now, it's "CONNECTING AFRICA."

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QUEST: I'm Richard Quest, let's have a dash to the closing bell. We are less than two minutes to the end of the rollercoaster today on the markets.

The Dow, we're down just a little tattle. So off 89 points, at its lowest point it was down 350 points.

On the triple stack the Nasdaq is set to break a three-day losing streak. It's down 25 percent so far. It's still given up a lot of its gains on the

day, so far. The S&P barely positive.

The Feds' attempt to stick to a soft landing has made a lot of investors nervous. Economist Shamik Dhar at BNY Mellon told me earlier the Fed may be

forced to throttle down economic growth completely.

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SHAMIK DHAR, CHIEF ECONOMIST, BNY MELLON INVESTMENT MANAGEMENT: I don't think neutral is nearly enough, to be honest. I think we will have to go

into positive territory, positive tightening territory. You say they don't want to use the word. But that's essentially where they're going to have to

go.

For that reason, it seems to me there are potentially surprises ahead, still, to the bond and equity (ph) markets because there is quite a lot of

timing to be done; 3 percent or thereabouts, may not be enough.

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QUEST: And so the markets and the lack of direction, this is where the 30 looks, as we come to the closing bell. The techs are having the best of the

day, others are down; the banks are lower. The tech sectors helping, of course, tick (ph) the Dow, cut its losses. And that's the dash to the

closing bell. The closing bell is ringing now. I'm Richard Quest. Whatever you're up to now and the hours ahead, I hope it's profitable.

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