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Quest Means Business
U.S. Reports Sky-High Inflations For May; U.S. Drops Testing Requirement To Enter Country; Inflation Threatens Travel Industry Rebound; U.K. Court Rules Government Can Fly Asylum Seekers To Rwanda; Multiple People Stabbed At German University; U.S. House Committee: Blames Donald Trump For Attempted Coup. Aired 3-4p ET
Aired June 10, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:23]
RICHARD QUEST, CNN BUSINESS ANCHOR: An hour to get to before the end of trading on Wall Street on a fairly dreadful day, on the street. Magnificent
views, I'll explain where we are, and why we're here, but need to show you the markets and as you can see, down over 600 points. We are off the lows
of the day, but barely.
The markets are falling sharply, inflation is at a 40-year high. The events of the day are grim. Higher than expected U.S. inflation figures make it
clear soaring prices are not going away.
The U.S. drops COVID testing requirements for international travelers.
The CEO of Wyndham hotels will be with me here, and I'm on the edge literally and figuratively and you'll see what it was like taking a walk on
the edge. Today, we're 1,200 feet above New York City.
We're live in New York. It is Friday. It's June the 10th. I'm Richard Quest and yes, I mean business.
A very good evening to you.
Tonight, we are suspended on the edge. 1,200 -- eleven hundred feet above Manhattan. It's all part of our new Summer Fridays.
Well, we are in the summer and we've decided like so many businesses around the world, when it comes to Friday, yes, I keep the tie, but we're going to
go a little bit easier, be out and about, celebrate Summer Fridays.
So today, we're on the edge, and it's the tallest viewing platform in the Western Hemisphere. It is the appropriate setting. I'm glad we're here
because inflation in the U.S. has always hit sky high levels.
Throughout this hour, you'll hear from the CEOs impacted by rising inflation. Investors navigating the market turmoil as the city is emerging
from its pandemic slump.
Now, the economic news may be gloomy, but it is a glorious day.
This is picture perfect, late spring before the humidity and horrible heat of the summer arrives in New York and we are going to celebrate today our
Summer Friday.
But we do begin with the latest inflation numbers which are truly awful, 8.6 percent. The CPI rose in May. That's year-over-year, driven by higher
energy and food prices. What is worrying is core inflation.
Core inflation rose by some six percent. Now, what it does is dash the hopes that peak inflation is behind us. Friday's number is the highest
since 1981. I remember that, adding urgency to policymakers. President Biden said he will do what he can, called on Congress to act and blamed
Russia and the invasion.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Today's inflation report confirm what Americans already know. Putin price hike is hitting America
hard. Gas prices at the pump, energy, and food prices account for half of the monthly price increases since made.
Inflation outside of energy and food, what the economists call core inflation moderated in the last two months. Not enough, but it moderated,
it has come down.
We need it to come down much more quickly.
My administration is going to continue to do everything we can to lower the prices to the American people and the Congress has to act.
(END VIDEO CLIP)
QUEST: Rahel Solomon is with me to talk more about exactly what this is all about, and how we have got here. This idea that somehow inflation had
peaked. I always find it a bit suspect because bearing in mind, we've only had the first of sort of, you know, the interest rate rises, monetary
policy lag is six to nine months and there has been no change in the external factors that would have led to that. Tell me more.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Yes, so if you think about sort of what was causing inflation, right, pre pandemic or during the pandemic,
it was a supply chain issues. It was the soaring demands and that perhaps some thought had started to ease that maybe demand had started to cool,
maybe supply chains had started to ease, but the information today suggests that that that is not the case.
In fact, we're already seeing some acceleration, which quite simply not to be dramatic, but no one was expecting among the more optimistic, some were
hoping for low eights, 8.5 was the highest I saw.
So this number coming in, an acceleration of what people were expecting.
QUEST: Right, so what do we -- has that changed where people now believe the roof of inflation is?
SOLOMON: I mean, it's a scary thought. But I think -- I think anything is on the table at this point, right? Because supply chain issues apparently
are still here.
QUEST: Very much so.
SOLOMON: Demand is still hot, right, and we're still of course dealing with the war and its impact on commodities like food prices, which by the
way according to this latest CPI report, 10.1 percent.
We haven't seen a number like that in the double digits for decades and also, of course, energy. How can we escape energy prices?
[15:05:14]
QUEST: It's a uniquely American situation. The RBA in Australia raised rates because of high inflation, much lower level, I agree. The U.K. has
had four rate rises so far. The ECB says, it is about too. We don't know how much monetary medicine is going to be needed.
SOLOMON: Yes, I mean, I think there was a hope that as prices have started to rise, we would see some demand start to cool, right, that we would see
some pressure to be let out, some steam be led out, but we're not seeing that. And so what we're seeing in the markets today is that this fear that
the Fed is going to have to do more, it's going to have to raise rates more aggressively than perhaps some had hoped.
And that's why we're seeing -- you know, it's not just us, Richard, that up here on the edge. I think investors are really on the edge today, too,
because it looks like the Fed is going to have to be quite aggressive.
QUEST: Interesting. We are here up on the edge, which is sort of a way up. I mean, I guess, there is never a good time to inflation, but in the
summer, sort of at least you've got the decent weather, and people are out and enjoying themselves and it is good post pandemic to see people back.
And of course, this will be talking to U.S. now, opening up even more.
So tourism is a factor in all of this.
SOLOMON: It is a factor because of course, Memorial Day was just a few weeks ago, right? We know Americans are driving more, people are traveling
more because it's a summer season. And what does that do, that's great for Americans who you know, deserve the vacation, but it also means that demand
is increasing when the Fed is really hoping to lower demand.
QUEST: Summer Fridays. Now, we do not enjoy the luxury that our colleagues do within Warner Brothers/Discovery, which is to have Friday afternoons
off. Well, if we weren't we wouldn't be here now.
But are you going to make the most of the summer?
SOLOMON: I certainly plan to. I hope to spend more Fridays with you.
QUEST: Well, hopefully not here.
SOLOMON: No, not here.
QUEST: Definitely not here, but there is plenty to go. Lovely to see you.
SOLOMON: Yes, yes.
QUEST: Many, many thanks, indeed.
The markets fell very sharply after the announcement. The Dow is down more than 700 points. It was off by more than 800 earlier in the day. The S&P
500 and the NASDAQ sharply lower as well, higher inflation, stoking fears that the Fed will raise rates faster.
Kristina Hooper is with me, the Chief Global Market Strategist at Invesco. All right -- joins me via Skype.
Now, we thought it was over. We had a couple of really good strong rallies, what today has proven is it is not?
KRISTINA HOOPER, CHIEF GLOBAL MARKET STRATEGIST, INVESCO: That's absolutely correct. Inflation continues to be a very, very significant
issue. But keep in mind that we should really be expecting this, given that confluence of events that have taken us here. From very, very significant
fiscal stimulus during the pandemic, to elevated household savings. All those things have combined to take us where we are today and of course,
helped by Russia-Ukraine.
QUEST: So the market -- before we had that little burst of optimism last week, the market had put on a bit of weight. Now, it's lost most of that,
down six percent in terms of two days of losses. How -- the old the old question, I make no apology for asking it again and again and again. How
low do you think we go?
HOOPER: Well, Richard, it's hard to tell how low we will go. I don't think we're going to have a dramatic selloff from here. I think the worst or much
of the worst has been priced in.
This is just a surprise. I think of this as something like a whiplash event. It was well above expectations, well above the last print in terms
of headline CPI and so markets immediately started to worry about what that meant for Fed tightening.
And of course, what we know about economic cycles is that typically, Central Banks often have something to do with choking off those economic
cycles and causing recessions.
So this just heightened recession risk significantly, sent stocks down, but that often is the kind of visceral reaction we get the same day data is
released.
QUEST: Kristina, look, I know many private economists do not and certainly the IMF and the World Bank does not have risk a formal recession as their
base case scenario. But I do wonder at what point does it become a sort of a statement of the obvious that there is likely to be a recession?
HOOPER: Well, I think it's far less obvious right now in the United States than, for example, the Eurozone. The U.S. economy is much better shape.
That doesn't mean that recession risks haven't increased today, they have, but it is still in pretty good shape.
And so you could see a soft landing engineered by the Fed, in that we could see companies cut job openings, but not so much, you know, conduct large
scale layoff, so that gives us a path.
[15:10:04]
QUEST: Now, you see that really is the -- that's the nub of it isn't it?
It is this idea that because in the U.S., the inflation is often regarded as demand led versus supply led in Europe, there has to be a let off in
demand. Do you believe unemployment has to rise as part of this process?
HOOPER: I don't think it has to, because what's the real issue when it comes to labor market? It is wage growth. So if we can cut job openings,
then employers don't have to keep raising wages to retain and attract employees. So it can happen. I know that it is something of a Goldilocks
scenario, but it can't happen, and I believe it will.
QUEST: Kristina, the only thing I know, actually, I'm asking everybody this, how are you going to make the most of the summer? Now, I know it's
difficult. But are you actually going to make the most of the summer, get yourself off on a Friday, go to the beach, go to the mountains? Or are you
going to have a bit of a rest the summer?
HOOPER: I definitely will. And my husband said to me, where can I take you? You know, someplace expensive for our anniversary. And so I said the
gas station.
QUEST: Well, I love it. I wasn't expecting that. All right, lovely. Well, before the summer is over, we'll get you down from Greenwich, Connecticut
and we will talk face-to-face. Lovely to see you. Have a lovely weekend. Thank you very much indeed.
HOOPER: That would be great.
QUEST: Ahead on QUEST MEANS BUSINESS. Now, last night, I watched the January the 6th hearings, the first primetime hearing, and it was really
quite an extraordinary occasion.
After the break, we will consider the case against Donald Trump. The hearings have begun, we'll see what they're likely to have meant and the
United States has lifted -- it was a fairly useless COVID requirement, but it was a bloody nuisance, when you actually had to do it on a regular basis
as I've done more than my fair share.
Anyway, no more -- no more testing to come back to the U.S. It is QUEST MEANS BUSINESS and a very good evening to you.
(COMMERCIAL BREAK)
QUEST: The United States announced today it is dropping the pre departure testing requirements to visit the U.S. It was a 24-hour requirement, you
could do antigen, rapid test, anything you like, but you had to have it in advance if you are going to come into the U.S.
The travel industry had been frothing at the mouth to try and get rid of it. And from everyone from Airlines for America the travelers, everybody,
delighted that it is actually gone.
[15:15:20]
The Biden administration says the CDC made the change on science and data. Arlette Saenz is in Los Angeles where the President is hosting the Summit
of the Americas.
I was surprised, Arlette, I thought that this would not go during the summer simply as an insurance policy. They wouldn't want to take the risk.
But why did they do it?
ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, the Biden administration, the CDC ultimately has decided to scrap one of those final
remaining travel requirements that really stemmed from the COVID-19 pandemic now announcing that international travelers coming to the United
States will no longer need to obtain a negative COVID test before their travel.
Now, a senior administration official says that they made this decision based on the current data and science, but they did give themselves a 90-
day period to review this noting that they will be monitoring whether there are other variants that are coming amid the pandemic that might make them
reevaluate whether to require this.
The administration had been facing a lot of pressure from the travel industry to lift this requirement. Several travel associations, they have
really applauded this move, saying that it's marking the next step in trying to improve inbound air travel to the United States.
But this really comes as you've seen this consistent loosening of restrictions, as more vaccines have become available, people are getting
those vaccines, and also the severity of COVID-19 cases are going down.
You'll remember that just in April, a Federal Judge said that the CDC had overstepped its authority when it came to the mask mandate on planes so
people no longer have to wear masks when they travel in the country.
And today, the CDC taking that additional step saying that folks coming here to the U.S., you don't need to have that negative COVID test, though
they do still recommend that people do that. But it's not going to be a requirement for people as they're traveling, especially with the summer
travel season heating up.
QUEST: Arlette, what happens now? I mean, the industry is moving forward and is aiming to capitalize on this. And judging by what the President was
saying today on inflation, tourism has to be part of that strategy, if you like for growth, but at the same time, it is now getting very expensive,
both for Americans to travel domestically, and for them to travel -- for foreigners to come here?
SAENZ: Yes, and I mean, that is one of the areas where there have been an uptick when you try to book a flight here in the U.S. or traveling to the
U.S., when you try to book hotels, those prices are increasing.
You also take into account the rising gas prices, as so many Americans will pack into their cars to go visit family or head to the beach over the
course of the summer. And they're really feeling that pain of inflation.
But with that lifting of that testing requirement, that's going to make it a little bit easier for folks to travel here in to the U.S., perhaps some
people may be reevaluating and trying to make more plans as this requirement has now been lifted.
QUEST: Arlette Saenz, joining us from Los Angeles. Now, a reminder of the way the markets are moving at the moment because we've got to keep an eye
on that throughout the course of the hour. We are down over 700 -- or it was 700. We pulled back just a little bit in the last half hour or so. But
the market is still very sharply down.
And the top story of course, U.S. inflation is hitting its highest level since 1981. Price rises are hitting consumers around the world. Inflation
is just below eight percent in Turkey, eight percent in the Eurozone, and prices -- sorry, eight percent in the U.K., and as you can see there, a
whopping 73.5 percent in Turkey.
That's a concern for hoteliers as well. There are concerns price increases will be hitting travelers' wallets, and hospitality profits. In the U.S.,
gasoline prices are up almost 50 percent. Airline tickets are up more than a third and overall inflation is 8.6 percent with problems spreading around
the world.
Wyndham Hotels has 9,000 hotels worldwide. Geoff Ballotti is with me.
First of all, it's just good to be able to do this.
GEOFF BALLOTTI, CEO, WYNDHAM HOTELS: It is. We haven't done this in a long, long time face-to-face.
QUEST: It is very good to see you.
BALLOTTI: Four or five times without it.
QUEST: First of all, what do you make of the fact that they have lifted the testing requirement?
BALLOTTI: Absolutely, positively thrilled. You mentioned Roger Dow at U.S. travel, it was U.S. Travel, the American Hotel and Lodging Association.
Every U.S. chamber, every association out there, Richard, you've been talking about it being needed and it happened today and it'll begin on
Sunday night and what that will mean, what we make of it is that it will be another five million international inbounds coming into this country in
2022. It will be another up to $10 billion of spending in what is as we're seeing here in the United States of America, what is a record summer.
[20:20:23]
QUEST: All right, it's going to be a record summer, but there's also this inflation problem.
BALLOTTI: There is.
QUEST: And you're seeing it in labor, you're seeing it in materials, and you're seeing it in energy costs for the air conditioning for your hotels
and heating in other parts of the world. How are you managing it? What's your estimate it is going to be?
BALLOTTI: Well, we're managing it very, very, very well, because the demand is actually outpacing the inflation. When you look at what is
happening, in terms of as you've been reporting all week long the demand, it's well above inflation, the industry is having a record, record year
right now in terms of average daily rate.
QUEST: So what are you going to do? Your costs are going up? How much of that are you going to pass on?
BALLOTTI: Well, the costs are going up. But in real dollars, they're still behind where they were in 2019. We are doing everything we possibly can
with our owners to actually lower costs of the hotel so that the costs are affordable, and when you look at the demand that's out there, when you look
at as you've been reporting, the savings that are out there in consumers' bank accounts right now, and the $3 billion of unspent --
QUEST: Sorry, I thought it was -- obviously, some people are getting happy.
BALLOTTI: I think they're waving at you. Oh, look, Richard, someone is coming down. I hear you've done this before.
QUEST: Oh, Good Lord. It is behind us.
BALLOTTI: It is behind us.
QUEST: It is behind you. You can't see, up there, they are doing the edge, the lead and whatever else.
BALLOTTI: Haven't you done that?
QUEST: I did and we're going to show it at the end of the program. So are you able -- do you have pricing pressure to be able to raise prices? Or is
the competitive situation so bad?
BALLOTTI: There is absolutely enough ability to continue based on the demand that we're seeing across the country. This was the busiest Memorial
Day weekend that the industry has ever seen.
We talked about it this time last year on your show that last year's Memorial Day weekend was a good 10 percent over Memorial Day before COVID
hit. This year was 15 percent over last year, so 25 percent more demand that's out there.
There is absolutely the ability to continue for our small business owners and our hotels to cover those inflationary costs.
QUEST: So now what you do in Wyndham? Where do you grow? I mean, Asia is still a real problem.
BALLOTTI: But it's been growing. It grew double digits in the first quarter despite that problem.
QUEST: You're an optimist.
BALLOTTI: I am the eternal optimist. It was thrilling to see the bounce, you know, throughout the last just a few days of optimism over there with
both Beijing and Shanghai being lifted. But no, we continue to invest in technology.
One of the things we're most excited about, you've been asking your guests all week long, is where are you going on a summer holiday? Where are you
going on a summer holiday this year? You know yet?
QUEST: I do actually. I've got a month long -- long service leave. So I'm going to learn French in France.
(GEOFF BALLOTTI speaking in foreign language.)
QUEST: I wasn't expecting that.
(GEOFF BALLOTTI speaking in foreign language.)
QUEST: Canadian.
BALLOTTI: Canadian.
QUEST: Canadian. The only --
BALLOTTI: But are you driving? Are you flying?
QUEST: Where to France?
BALLOTTI: On your vacation in France?
QUEST: I'm going to be --
BALLOTTI: In a car.
QUEST: Maybe. Yes.
BALLOTTI: Yes. And there you go. And that's the type of demand that's out here right now. We're working very hard to send people on vacation. We
think we have the number one booking app out there and we have just launched our Road Trip Planner and all of these people here, I guarantee
you --
QUEST: Hang on, hang on. I'm not letting you get away with this. I'm not letting you get over this, even optimistically. They may be driving.
BALLOTTI: They're driving. More than flying.
QUEST: But gas up $5.00 a gallon or will be that takes its chunk.
BALLOTTI: Absolutely, positively based on what you've been reporting all week, not slowing it down.
QUEST: Yet, yet.
BALLOTTI: But no. Based on what's out there in terms of demand, untapped demand, and 30 percent. Think about the number of unused vacation days that
Americans have been unable to take in 2020 and 2021.
U.S. travel, Roger Dow, also estimates that 30 percent of our nation's consumers did not take a vacation day, and those unused vacation days will
be taken this summer and we think well into 2023.
QUEST: So finally, well, first of all, where are you going?
BALLOTTI: Where am I going? I'm going to get in a car right now and drive up to Cape Cod.
QUEST: On a Friday night?
BALLOTTI: On a Friday night.
QUEST: Are you mad? On a Friday --
BALLOTTI: But you've been reporting -- you've been reporting as well on why people are working remote and that's a big, big trend as well.
QUEST: But a Friday night? You can't.
BALLOTTI: I don't know the traffic will be that bad. Waze is saying three and a half hours. I could pull it out. It's been a while since I've moved
out.
QUEST: It will be fun. If you get to Cape Cod from Manhattan in three and a half hours.
BALLOTTI: I'll call you.
QUEST: I'll eat my hat, but I'll be on my way to Lisbon tonight because I'm filming.
Good to see you, sir. I very much appreciate it.
[15:25:10]
BALLOTTI: Always a pleasure.
QUEST: Thank you very much indeed.
BALLOTTI: Thanks for having us.
QUEST: Next time we'll do it in French.
BALLOTTI: You bet.
QUEST: Let me show you the way the markets are trading at the moment. Because we've had those inflation numbers and the inflation numbers are
really quite seriously -- the Dow is now down 631 points, 621 points. The NASDAQ is actually off some three percent or so, 2.7 percent, so that is
quite sharply lower.
We will continue in just a moment. It is Fridays. Let me explain the idea of Summer Fridays, it's really very simple. We know that companies say take
it easy on a Friday. So maybe I should remove my tie, but not just yet. Maybe I should be a little more chill. We will get there in a moment.
At the moment, we are on the edge, literally, figuratively. It's a spectacular, spectacular Friday afternoon in New York City.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Well, welcome back. I am Richard Quest. More QUEST MEANS BUSINESS from the edge in just a moment, part of our new Summer Fridays, out and
out, enjoying the best of what we can.
We will hear about the case against Donald Trump. Lawmakers are alleging the former President incited that January the 6th riots, and inflation
eating into New York restaurants' profits, they're just getting back on their feet. Now, they are being hit with inflation, people are still eating
out.
But we'll talk to the owner of Black Top Restaurants who joins me.
It's only after the news headlines because this is CNN and on this network. The news always comes first.
[15:30:00]
Ukraine says it's holding the line of defense is a ruthless battle for control drags on in the Donbas region. One local officials accusing Moscow
of using lies and propaganda prematurely to declare victory in Severodonetsk. He admits the situation is increasingly difficult.
The U.K.'s high court rule today, the British government can go ahead with its controversial plans to fly asylum seekers to Rwanda for processing.
Refugee charities have filed for an injunction to block the first deportation set for next week. The plan is under judicial review and a
ruling on the Gallup is expected next month.
Students in Germany have stopped a man suspected of stuffing multiple people at the university. The school says they managed to overpower him
until the police arrived to make an arrest. At least four people were injured, some of them seriously.
They could not have been clearer in last night's public testimony by the House Committee on the January the 6th insurrection. Donald Trump was at
the center of it. Donald Trump in flamed it and one officer present gave chilling evidence.
(BEGIN VIDEO CLIP)
CAROLINE EDWARDS, U.S. CAPITOL POLICE OFFICER: There were officers on the ground. You know, they were bleeding. They were throwing up. They were, you
know, they had -- I mean, I saw friends with blood all over their faces. I was slipping in people's blood.
(END VIDEO CLIP)
QUEST: Now the hearings are meant to show that the former president is culpable. The vice chair, the Republican Liz Cheney said that Trump has a
sophisticated seven-point plan to overturn the election.
(BEGIN VIDEO CLIP)
REP. LIZ CHENEY (R-WY): President Trump invested millions of dollars of campaign funds, purposely spreading false information, running ads he knew
were false and convincing millions of Americans that the election was corrupt, and that he was the true president. As you will see, this
misinformation campaign provoked the violence on January 6.
(END VIDEO CLIP)
QUEST: Elie Honig, our legal affairs analyst is with us. Elie, as I listened to this journey last night, I was very struck. She sounded like a
prosecutor doing an opening speech to a jury outlining the evidence that she was going to prove to show guilt, but who's guilt and how?
ELIE HONIG, CNN LEGAL AFFAIRS ANALYST: Indeed, Richard. Listening to Liz Cheney brought me back to my days as a prosecutor. She took a very
methodical, evidence-based approach that I thought was really persuasive. And I think it's clear that Representative Cheney and the committee
understand they have two audiences here. On the one hand, the American public needs to know the full story. History needs to record the full
story.
But on the other hand, quite pointedly, the United States Department of Justice several times, Representative Cheney said illegal. She seemingly
went out of her way to say illegal and it's clear to me one of the things the committee is trying to do is up the pressure on DOJ to bring charges
because ultimately, only DOJ can do that.
QUEST: So, if DOJ won't bring charges, I guess this is sort of slightly out of your wheelhouse. But you -- but which for you is the more important
audience here, the DOJ, or the American people who was really being factored here?
HONIG: Nothing's out of my wheelhouse. I can handle it. It depends what the end goal is. Look, I think they're both important. The record has to be
told not just for history but -- Richard, but we have an ongoing threat to democracy in this country. And I think that's one of the points the
committee has stressed. This is not over. This will continue into 2024 particularly if Donald Trump runs again.
But if people are looking for concrete consequences, really all Congress can do is hold hearings, issue reports, perhaps pass legislation and make
findings. But they can't do anything beyond that. Only prosecution, only DOJ or perhaps state prosecutors can actually bring an indictment and bring
Donald Trump to a defendant's table in a courtroom.
QUEST: When you heard what we heard last night, and you've got a pretty good idea of what evidence is still to come having followed this. Have they
made the case? No -- not about a riot per se or that there were people who had -- who had thought the president wanted? Do you think that there's a
strong link to the president?
HONIG: So I think that's exactly the question that I'm looking to see. Is there a link between the president and the White House on the one hand and
the actual riot, the Oath Keepers, the Proud Boys as extremist groups that stormed the Capitol and the other. Bennie Thompson, Representative
Thompson, the chair of the committee said there are conversations between extremist groups and people in Donald Trump's orbit.
[15:35:03]
But we don't know what either of those terms means. Conversations can mean just about anything. Orbit can be defined in just about any way. But I
think you make another really important point, even before anyone breached the physical Capitol building I think there's a good argument that Donald
Trump committed a massive, potentially criminal fraud on the United States by spreading the big lie and trying to use that to pressure state
legislators, the vice president, the courts.
So I think in a way, there's almost two separate conspiracies here. Arguably, if you look at it from a prosecutor's point of view,
QUEST: I mean, what also it is, it's that famous line, the Shakespeare line of who will rid me of that troublesome priest? If you say it out loud long
enough, will nobody help rescue me from this election that's being stolen? I suppose you are impliedly saying, get on with it.
HONIG: Yes. Donald Trump has shown over the years that he is masterful at that exact art. He knows exactly where the line is, where you can say it
without quite saying it. Here, what does he do? He scheduled the rally for January 6. Why that date? Because that's the date Congress was beating to
certify his loss. What does he say? Be there. We'll be wild. And we got to see in the evidence last night, exactly how his followers interpreted that.
While the riot was ongoing, Donald Trump tweeted negatively about Mike Pence. Moments later, the crowd is reading his tweet out loud and chanting,
hang Mike Pence. So, Donald Trump has really mastered that sort of Shakespearean art of saying it without quite saying it.
QUEST: Right. Now, finally, where do we go from here? So, there's going to be more hearings. And our mutual colleague Jim Sciutto said yes, he tweeted
that, he was tired of hearing this line, you know, nobody's mind will be changed in all of this. Those who are fall rights won't believe it. Those
are on the left think everybody was a crooked like villain to start with. So, it all begs the question the long term purpose.
But when I watched it last night, Elie, I was greatly heartened in a sense by the solemnity, the seriousness, the gravitas and by Liz Cheney, who
indeed rose above politics.
HONIG: Yes. I completely agree with Jim Sciutto's tweet there, his sentiment. First of all, I don't necessarily buy into this notion that
everybody is completely immovable. And this is all just a waste of time. Second of all, whether people are movable or not, we need this story. This
is an important, sad, tragic chapter in our history. We need a full accounting of it. And I should add, even as somebody who believes January 6
was a very serious threat to our democracy, even watching last night brought me back to that day, brought me back to a lot of the details.
You know, we've heard things in dribs and drabs over the last year, but it has to be told all together in one coherent story. And that's exactly what
the committee is going to be doing over the next couple of weeks.
QUEST: Over the next couple of weeks, you'll be with us to help us understand exactly what it's all about, how we're doing it and the
significance. Very grateful to have you with us tonight.
HONIG: Thanks, Richard.
QUEST: The market is still heavily down. And I often find when there's really bad economic and when there's really bad economic and market news,
nothing beats a good meal or a bit of taste of something nice. After the break. We'll talk about food inflation and how things are moving forward.
QUEST MEANS BUSINESS live tonight. The start of summer Fridays. It's a beautiful Friday in New York.
(COMMERCIAL BREAK)
[15:41:13]
QUEST: Market (INAUDIBLE) has taken place over the hot inflation data. Look at the numbers, we seem to have hit an equilibrium of around down 600. So
we don't know like we're getting worse. But we have got 20 minutes to go. So anything could happen between now and then. We're off over 700 at one
point. Essentially the market is now pricing in several full throttle fed hikes, half a percent per time because of this higher inflation number at
8.6 percent.
Inflation and labor shortages. They are just about everywhere, not only in Europe or the U.S. economy. All major economies are now suffering from the
problem. Being squeezed because we've also got demand up. Just look behind me. I mean demand, demand is everywhere. People are wanting to travel.
Airline tickets are more expensive. Hotels are more expensive. And the cost of eating out similarly more expensive.
The mate -- to dine out is accelerating. CPI according to the latest numbers, the menu costs 7-1/2 percent more versus a year ago. 7-1/2
percent. I think in New York, it might be a bit more than that. Biggest jump since 1981. The dining chain Black Tap is expanding despite a squeeze.
It's made a name for itself with larger than life milkshakes and -- larger than life milkshakes and burgers. Julie Mulligan is the owner of Black Tap
Restaurants founded in New York in 2015. Now, this is wonderful.
JULIE MULLIGAN, OWNER, BLACK TAP RESTAURANTS: That is our special shake for the month of June. We're doing a campaign fresh in '22 where we're doing a
new shake and a new burger every month so that people coming out have something fresh and new to try and even more excuse to come out and dine.
QUEST: So, tell me. What are you experiencing in terms of the return? People coming back, what are you seeing?
MULLIGAN: We're seeing people come back. We're seeing though that the schedule of when people are dining out is a little bit more irregular than
it was before the pandemic. So, all of your peak periods, weekends, dinners are crazy. In between lunch and dinner sometimes is a little bit more slow
than it was before. We're finally starting to see more tourism in New York, we're seeing a really nice mix of both locals and tourists coming back out
and dining.
QUEST: And how are you negotiating your own issues with inflation?
MULLIGAN: So, I would say we work twice as hard to do the same thing that we've been doing all along. We have a very different labor market and
people who are looking for very different things with their job and employment. And we're just like the rest of the world dealing with supply
chain shortages that are surprising and coming from all directions all the time.
QUEST: And in this sense, look, prices are going up.
MULLIGAN: Yes.
QUEST: You've got a staffing difficulties or are you managing to staff?
MULLIGAN: We're managing to staff but it's a whole different --
(CROSSTALK)
QUEST: -- having to put wages.
MULLIGAN: We're what?
QUEST: How are wages? Are you having to pay more for labor?
MULLIGAN: Wages have gone up, but it's just that we're seeing people looking for different things. Some people are able to find jobs now with
more flexibility outside of the restaurant industry. Whereas before the restaurant industry was the most flexible job for people. So we're
competing with people who can now work remotely and work from home and, you know, we're seeing a younger person start who has less experienced. People
some leaving the hospitality industry and moving on to new things.
QUEST: What have we got here?
MULLIGAN: So here we have our award winning wagyu steakhouse burger. It's a wagyu patty with pepper jack cheese, crispy bacon, crispy onions and A.1
steak sauce and garlic mayo. This one the New York City wine and food festivals burger bash in 2021. We have our all-American which has been on
the menu the whole time. It's our classic. It's our -- one of our best- selling burgers.
[15:45:05]
We have our award winning Korean barbecue wings and then the chocolate shake. And then this, I don't know if I said earlier, is our blueberry
Meyer lemon shake, and it's got pound cake crumble on top. He approves.
QUEST: I have no idea what this is going to do to my glucose monitor.
MULLIGAN: I don't either. I'm not sure.
QUEST: I guess it's -- you've been waiting long and hard for things to get back.
MULLIGAN: Yes.
QUEST: You need to take maximum advantage of it.
MULLIGAN: Yes.
QUEST: But to some extent, you're now set with a whole new raft of problems.
MULLIGAN: Yes. All true. We're choosing to expand we're going to be opening between the end of this year and next year in Miami, Dallas and Nashville.
And I think that all of those markets, we've had to work, you know, twice as hard to get our kitchen equipment. The brands that we're used to are not
necessarily available, they might be more expensive. It's been a lot of adjusting but we still believe that people are dining out and looking to
dine out and that it's important.
QUEST: All right. After the break.
MULLIGAN: OK. Fair enough.
QUEST: It's a bit too dangerous.
MULLIGAN: Sometimes I eat it with a knife and fork. So, you know, I don't think people would want to say that.
QUEST: I vaguely don't.
MULLIGAN: Sometimes, yes.
QUEST: Thank you very much. That is so good. That is in decently good. Thank you.
MULLIGAN: Thank you so much.
QUEST: Now, China's economy. Well, we're -- what we're seeing here, of course in the United States is an economy that is growing much faster,
slowing down with interest rates, but a summer that is well and truly underway. The same cannot be said for Selina Wang in China, who is once
again experiencing great difficulties as the country moves forward. Selina Wang reports.
SELINA WANG, CNN INTERNATIONAL CORRESPONDENT: China's economy is still hurting but there are signs of rebound maybe around the corner. Shanghai is
finally exiting its brutal two-month lockdown that forced factories to close and worsened global supply chain woes. The world's largest container
port and Shanghai has reopened helping to boost China's trade data. Exports jumped nearly 17 percent in May from a year ago, compared to less than four
percent growth in April.
According to shipping data from vessels value. Average waiting times at Shanghai support have shortened to 28 hours compared to 66 hours in late
April. And in comparison to surging inflation in the rest of the world prices are cooling in China. That's because of the country's COVID
lockdowns that have put pressure on factory and retail activity. Analysts say that allows China's central bank to increase stimulus to prop up the
economy.
Compared to other countries that are scrambling to reduce inflation with aggressive interest rate hikes. China's economic slowdown has largely been
self-inflicted. The country continues to shut down entire communities over just one COVID case. China's leader Xi Jinping has also cracked down on the
technology sector and the real estate industry to curb excessive borrowing. But regulatory nightmares for tech firms may finally be coming to an end.
Earlier this week, the Wall Street Journal reported that Beijing cybersecurity review of ride-hailing giant DiDi is about to end. That would
allow DiDi to return to app stores in mainland China. Regulators have also said they would support overseas listings of Chinese tech companies. And
just this week, authorities issued 60 new game license following a months long freeze. But the economy in China remains hostage to lock downs.
Neighborhoods in Shanghai are going back into lockdown over just a handful of COVID cases. Here in Beijing all entertainment venues are closing down
to the capital's largest district. Just days after they were allowed to reopen. Zero COVID here in China is not going away. And neither is the
economic damage that it inflicts on the economy. And when the world's second largest economy slows down, well, the whole world does. Selina Wang,
CNN, Beijing.
QUEST: Now that I am 1100 feet above the sky, above the ground. This is the edge as you'll be familiar. There are hundreds of people enjoying. Hello,
lovely weather. Enjoying the day here. Well, what's it like when you go even further and you go up there? Oh look, you can actually see the people,
I guess you can't see them but you can actually see the people who are now leaning out over the edge. I did it and you will see after the break.
(COMMERCIAL BREAK)
[15:52:18]
QUEST: Look at that. There it is. They're leaning out over the edge. It's called the climb and they are leaning out. Would you do that? Well, I said
I would never do it. And then I had no choice. Because come New Year's Eve my husband and I went up there and had a go. We went live from the edge.
(BEGIN VIDEOTAPE)
QUEST: Oh my goodness. Whose idea was this? Anisa (ph) how many feet up?
UNIDENTIFIED FEMALE: We're at 1,189 feet.
QUEST: Eleven hundred and eighty-nine feet. Look at it. King of the world. I'm terrified of heights. My husband is behind me. What are you doing down
there?
UNIDENTIFIED MALE: Oh, sorry. I'll catch up.
QUEST: It's just great. Chris.
UNIDENTIFIED MALE: Yes.
QUEST: Come on.
UNIDENTIFIED MALE: You got a nice night on the town. I didn't realize (INAUDIBLE).
QUEST: I told you it literally a night out on the town. I know that I'm tethered to the building in three or four places. And I know that I could
pretty much go. Oh, and nothing would happen. But I'm still scared. When they said do the climb, I thought -- I don't like heights, I won't enjoy
it. But this is absolutely outstanding. The freedom, the -- of opportunity, the -- just the wind.
Oh. Oh my goodness. It's the building. It's the life. It's the job. It's the people. It's the loves, it's the crime, it's the -- we look down and it
doesn't look real. And yet I know, because I've lived here for so many years what's going on in everybody -- it's just amazing.
(END VIDEO CLIP)
QUEST: Now the edges, which is where we are at the moment got to be very careful of course, up here. They are the ones who are doing it in the day.
I think it may be better to do it at night rather than a day. It really is quite a terrifying experience. But as for the place itself, well, it is the
largest something in Western Europe. I think the largest bit protruding out of a building. It's at Hudson Yards which is over on the west side which
indeed is where of course at CNN and where QUEST MEANS BUSINESS come with you.
[15:55:02]
So, it's actually our office building. And if you look here you can start to see the hundreds of people. The building opened in 2020 and then
promptly had to close because all leases parted because of the pandemic. And since then it has reopened. It is one of the attractions that is just
absolutely delightful. And on a day like today is picture perfect and glorious. I will explain the concept of our summer Fridays along with our
profitable moment in a moment after I've shown you the markets which are not pleasant to look at.
We are I think, just about reminding me towards the lows of the day, down 777 points. It's not surprising what tends to happen in these last few
moments of trading. So, just enjoy the view. Yes, there we go. The NASDAQ is off 3.3 percent. The Dow is going down. I'm guessing we could be off
nearly a thousand before we closed by the end of the day. I'll have a profitable moment, summer Fridays after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. So the idea of summer Fridays, why are we out and about on summer Fridays, really very simple. We've had a
horrible pandemic. There's inflation all around. And yet companies continue to -- our own company Warner Brothers, Discovery continually say, take it
easy on a Friday, don't host any meetings, don't have meetings on Fridays. Make sure people have room to breathe, to think, to enjoy.
And so we decided for the next month or two. Every Friday the program will come from somewhere different, somewhere enjoyable. So next week, for
example, we're in Lisbon, then will be over on little island. There's all sorts of places where we will be bringing our summer Fridays, so we can
enjoy. And the idea is really simple. The news is grim. We're not going to minimize, the markets are awful.
But somewhere in all of this as we've had tonight, we have little room to enjoy ourselves. Because this work life balance is important and we need to
gauge that difference between the two. So join me for our summer Fridays. And that's QUEST MEANS BUSINESS for this Friday night. I'm Richard Quest in
New York. I'll be in Lisbon next week. Whatever you're up to in the hours ahead, I hope it's profitable.
[16:00:03]
I'll see you next week.
(COMMERCIAL BREAK)
END
