Return to Transcripts main page

Quest Means Business

Fed Raises Rates To Highest Level In 22 Years; Sinead O'Connor Dies At Age 56; Etihad Brings Superjumbo Back Into Service; Mattel COO Makes Jump To Retailer Gap; Wrexham Making The Most Of American Preseason Tour; Dash To The Bell. Aired 3-4p ET

Aired July 26, 2023 - 15:00   ET

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

[15:00:29]

ISA SOARES, CNN HOST: Stocks are getting a late session boost courtesy of Jerome Powell. There is the market. It is doing well. The Dow Jones up

three-tenths of a percent, 125 points or so.

Those are the markets and these are the main events for you: Wait and see the Fed raises interest rates to a 22-year high while leaving its future

path open.

Airbus says it's still on track to deliver 720 planes this year. The CEO joins me live.

And the world mourns, a legendary singer who knew turbulent times, Sinead O'Connor has died at the age of 56.

Live from London. It is Wednesday, July 26th. I am Isa Soares, in for Richard Quest and of course, I too, mean business.

Good evening, everyone.

Tonight, the Federal Reserve has raised its benchmark rate to the highest level in 22 years. The quarter percentage point hike brings it to 5.25

percent as you can see there.

Fed officials paused at their last meeting if you remember, and they are leaving the door open to further increases. Chair Jerome Powell speaking

now, a moment ago. He said inflation numbers have been coming in better than expected.

Still, he said it is too soon to tell what the Central Bank will do next. Have a listen.

(BEGIN VIDEO CLIP)

JEROME POWELL, US FEDERAL RESERVE CHAIRMAN: I would say it is certainly possible that we would raise funds again at the September meeting if the

data warranted, and I would also say it is possible that we would choose to hold steady at that meeting.

We're going to be making careful assessments, as I said meeting by meeting.

And I'll close by saying we've raised the federal funds rate now by 525 basis points since March 2022. Monetary policy we believe is restrictive

and is putting downward pressure on economic activity and inflation.

(END VIDEO CLIP)

SOARES: Well, markets didn't react that much to the statement, it is kind of priced in, in many ways. The Dow moved higher after Chair Powell said

the June CPI report was better than expected. It's now a hundred points or so.

The NASDAQ and S&P 500 all saw gains, you see green arrows across the board. NASDAQ pretty flat at this moment.

Keeping an eye on all the moves indeed on what we're hearing from Jerome Powell is Matt Egan.

Matt, you spoke to me when that decision came in the last hour or so and you said if you were Jerome Powell, which you are not, you will take this

as a wait and see approach. That's pretty much the message that we've heard from him in terms of the next the future moves here, isn't it?

MATT EGAN, CNN REPORTER: That's right, Isa.

Jerome Powell, so far, he's playing this pretty close to the vest. He's really not tipping his hand one way or another. We heard that from the clip

you just played. Powell said that they're going to be taking this meeting by meeting. He didn't really say whether or not they'll be raising interest

rates in September. He said, it could happen. It could also not happen.

We know investors think it's not going to happen. Investors think that this interest rate hike today, lifting rates to the highest level in 22 years

will be the last one in this rate hiking cycle, but investors had been wrong on that before.

Powell was asked what will it take to get the Fed to stop raising interest rates, and he said, look, they're looking for signs that the economic

activity is cooling, that demand -- supply and demand in the labor market is coming into better balance, and he said he wants to see more progress on

core inflation, which excludes food and energy.

He described core inflation as "still quite elevated." And Powell, he also said that, it seems clear to him that they're going to have to hold

interest rates at these high, these restrictive levels for some time, and Isa, he said, they have to be prepared to move them even higher if

necessary.

SOARES: Yes, I mean, it's still -- I still can't get my head around the fact that they paused in June. I mean, to now hike 25 basis points, but

talk to us about the data. Because if they're taking it meeting by meeting, it is irrelevant, the data is important. It depends on the data.

CPI has gotten better, jobs quite strong. What do they need to be looking for before they then pull the plug on this?

EGAN: Well, listen. Powell pointed out that they still get two more inflation reports and two more jobs reports before they have to act again

in September and we know a lot can change in the span of just a few months. So he is leaving himself some wiggle room here.

As far as what he wants to see -- listen, I think they want to see continued progress in terms of inflation getting back towards that two

percent level. They also need to see that the jobs market is continuing to cool off.

[15:05:09]

You would imagine that Fed officials would be a bit concerned if they saw hiring re-accelerate in the jobs market, because that would raise questions

about whether or not there's enough workers to meet all that demand.

Likewise, I think Fed officials are going to be watching very closely what's going on in the commodities market, because if higher oil prices

lead to higher gas prices, that is going to sort of unravel some of the progress on the inflation front; the same thing with agriculture

commodities and food prices.

So they are going to be watching those areas very closely, Isa, and we'll just have to wait and see about whether or not the Fed is going to end up

having to do more here or if they're finally done.

SOARES: Matt Egan, appreciate you. Thanks very much, Matt.

Now, after a widely expected hike, investors are wondering how much, as Matt was saying, more the Fed will need to do to tame inflation. Price

increases in the US have slowed significantly since the last year.

In that time, as you can see there, the Fed has raised interest rates five times the last six meetings and still, core inflation remains above the

Central Bank's target. Some say it may need to do more. As you can see there, zero percent in June because there was no rate, they paused on that.

Andrew Hollenhorst is the chief US economist at Citi. He joins me now.

Andrew, great to have you on the show. Your reaction, first of all, to this 25-basis hike, pretty much the expected. How do you think the Fed will move

next?

ANDREW HOLLENHORST, CHIEF US ECONOMIST, CITI: I think what Jerome Powell is trying to do here is just keep options open and that is what you tend to

see central bankers want to do, keep all the options on the table. It really goes back to that context.

In June, that kind of strange meeting where Fed officials decided not to raise rates, but then raised their forecast to project that they'd have to

raise rates two more times this year. So one of those rate raises came today. That was well expected by the meeting.

You hear Chair Powell being really non-committal about whether September is going to be a hike, whether it will be a pause. I think with the recently

softer inflation data, it probably will be a pause.

But there is still a more serious question out there, which is, in the medium term, are rates high enough to slow down the economy enough to bring

inflation down? I really don't think we can answer that question yet. I think Chair Powell knows we can't answer that question yet. So you're

seeing him kind of keep all of those options open.

SOARES: Yes. He doesn't want to put himself in a position that you're going to have to reverse. And I mean, we heard from the former Fed chair, Ben

Bernanke, who basically said that the July hike might just be the last one, you're not confident that that's going to be the case, given the data that

we've been seeing.

HOLLENHORST: I think they'll probably continue to hike. Now, if you continue to get inflation reports like the one that we got in June, that's

enough evidence for Fed officials to pause, maybe pause for an extended period of time. But in the near term, some of these base effects are going

to go the other way. You're basically going to be comparing prices to lower prices in the past, that's going to mean the year-on-year readings

increase.

And then we have some really interesting emerging dynamics, one that you just mentioned, oil prices moving higher, gasoline prices moving higher.

That's headline inflation, Fed officials tend to care less about that. But underlying inflation, house prices. We're starting to see house prices

picking up faster. That could be another reason that Fed officials want to come back.

And remember, their guidance has been that they will hike one more time. Markets are seeing that as kind of a 50/50 proposition. September is

probably a time for them to look at that again, pause again, like they did in June and then November is when we think that next rate hike is coming.

SOARES: But it's looking more positive, perhaps, at least that's the sense I'm getting that we may be looking at a pause at the end of these hikes in

the in the next few months.

But what about core inflation? It is something that Matt talked about, our correspondent, Matt Egan, taming that core inflation? How do you see the

Fed targeting this?

HOLLENHORST: So that's where there's really an issue in terms of lining up the macroeconomic theory with where the Fed would like things to go in

their forecast.

The way that you get core inflation to slow is to slow down general cost inflation in the economy, and that usually comes with a substantial

weakening in demand and a loosening in labor markets.

Now, the good news about the US economy is it has proved very resilient to higher interest rates, we're still getting around two percent growth, we're

still growing jobs at about 244,000 jobs per month on a three-month moving average basis.

So that's great news for the US economy, but if what you want to see is core inflation slowed down, that strong demand for services, it has been

pushing up prices, it slowed down; house prices slowed down. You usually need more of a cooling of the economy.

So I think that's the medium term issue that the Fed may be facing here in terms of our policy rates really high enough.

Where Chair Powell is trying to go is to say, well, we'll just keep policy rates at these levels for longer. Credit conditions will continue to

tighten and maybe in time, that will bring down core inflation.

So I think there still is a real discussion about whether we're really going to get core inflation back to two percent in the near term.

[15:10:05]

SOARES: Andrew Hollenhorst, we really appreciate you taking time to speak to us. Thank you, Andrew.

HOLLENHORST: Thank you.

SOARES: Sinead O'Connor, the Irish singer known for both her hits and her outspokenness has died at the age of 56.

That Irish Taoiseach, Leo Varadkar paid tribute on Twitter writing: "Her talent was unmatched and beyond compare."

Stephanie Elam looks back at a career and legacy of this groundbreaking performer.

(BEGIN VIDEO CLIP)

[VIDEO CLIP PLAYS]

STEPHANIE ELAM, CNN CORRESPONDENT (voice over): Sinead O'Connor obliterated the image of the female music star in the late 1980s with a shaved head,

stirring performances, and a mouthful of controversial opinions.

[VIDEO CLIP PLAYS]

ELAM (voice over): O'Connor topped the music charts in 1990, with her version of "Nothing compares 2 U" written by Prince. She won MTV's Video of

the Year Award, "Rolling Stone" named her Artist of the Year in 1991.

She earned four Grammy nominations for the song and the album it was on, but accolades and awards seem to mean nothing compared to O'Connor's drive

to provoke thought.

SINEAD O'CONNOR, SING: Fight the real enemy.

ELAM (voice over): When O'Connor ripped up this photo of Pope John Paul II on national television, backlash reverberated around the globe.

Weeks later, a New York crowd booed the singer loudly and incessantly when she took her turn on stage at a Bob Dylan tribute.

O'Connor repeatedly defended herself calling herself Catholic and spiritual.

And in 1999, she became the first priestess of a dissident Roman Catholic group. When the Catholic priest sex abuse scandal exploded, O'Connor call

for the Pope to tell the truth.

O'CONNOR: We have the documents and we have the proof that tell us that we're being lied to and we're being lied to by people who are supposed to

represent Jesus Christ.

ELAM (voice over): O'Connor lashed out at other celebrities. Once called YouTube's music bombastic, started a war of words with Miley Cyrus when

O'Connor publicly urged the young performer not to ". let the music business make a prostitute of you," and accused Arsenio Hall of being a

drug supplier for Prince after the superstar's death.

O'Connor's personal life was tabloid fodder -- divorce, custody battles. The singer married four times, was mother to four children.

Tormented, talented, O'Connor attempted suicide in the late 1990s. In early 2022, she checked into a hospital while grieving the death of her third

son, Shane. At 51, O'Connor converted to Islam, covering her trademark shaved head with a hijab.

But she continued performing her music, reflecting upon a lifetime of struggle.

[VIDEO CLIP PLAYS]

(END VIDEOTAPE)

SOARES: Just a beautiful voice. Chloe Melas is in New York, and Chloe, will you just talk to us about Sinead O'Connor's legacy. How will she be

remembered?

CHLOE MELAS, CNN ENTERTAINMENT REPORTER: She will be remembered not just for her voice, but obviously isa for someone who did not shy away from

controversy.

I want to read to you a statement on behalf of her family obtained by RTE. It says: "It is with great sadness that we announce the passing of our

beloved, Sinead. Her family and friends are devastated and have requested privacy at this very difficult time."

You know, we just listened to Stephanie Elam take a look back at her life. We know that she struggled with mental health issues. We know that it has

been very tough for her since the loss of one of her children to suicide last year. And obviously that was very, very devastating to her.

Now, we don't know the cause of death. We don't know any of the circumstances around what has happened, but this is reverberating around

the world as people are learning of this devastating news and obviously, just 56 years old, so young, so much more of a life that she had ahead of

her.

But again, she was someone who spoke out about what she believed in. And when interviewed years later about that moment on "Saturday Night Live"

where she ripped up the photo of the Pope at the time. She says, you know, I don't regret it.

And so I think that that was very admirable when it came to Sinead.

SOARES: And in the last few minutes, we've also heard from the Irish Taoiseach who paid tribute to her on Twitter, he said, that she -- ". her

talent was unmatched and beyond compare."

Thank you very much, Chloe Melas there.

And we will be back after this short break.

(COMMERCIAL BREAK)

[15:17:27]

SOARES: Airbus must recall hundreds of planes for inspection after problems were found with engines made by Pratt & Whitney. It comes as Airbus posted

better than expected underlying profit for the first half of the year. Revenue was up 24 percent as jet deliveries picked up.

And that is been driven by a surge in travel demand post-pandemic, which is of course fueling an unlikely comeback for Airbuses A380.

Etihad is the latest airline to bring the superjumbo back into service.

Guillaume Faury is the CEO of Airbus, and he joins me now from Toulouse in France.

Guillaume, thank you very much for joining us. Let me start off then with that recall that we just mentioned of hundreds of planes. How much will

this impact your business here?

GUILLAUME FAURY, CEO, AIRBUS: Well, this is a recall for GTF engines that are powering the A320neo, that's one of the two engines that we have on

that plane, and this will impact our customers because the recall is for engines that are in service, installed on planes that are flying with our

airline customers.

So it will have an indirect impact to us, a very direct impact to our customers, to our airline customers, but when it comes to shipment of

engines from Pratt & Whitney to wherever, so on the short term, this will have no impact. So we don't foresee an impact for the year 2023 when it

comes to the ability of Airbus to deliver planes to our own customers.

SOARES: So no impact on that front. You do say and I've just been reading this. You say that you are still on track, I saw to ramp up production of

your best-selling A320neo, 75, I believe a month by 2026. How are you going to achieve that, sir?

FAURY: Well, that's correct. That's the target that we have and we are putting together all efforts with our suppliers, our partners and with the

putting in place the production system, the final assembly lines to produce those planes.

So we were at 65 pre-pandemic, 65 planes a month for this A320 family, and we are now ramping up again with a new target that is 75. As we have

increased the goal against the backdrop of a very strong demand for the family of the A320 and that's putting together more production systems and

working closely with the suppliers to get to that number by 2026.

[15:20:04]

SOARES: And not just strong demand for the A320 as you can see, we saw better than expected underlying profit for the first half of the year,

revenue up 24 percent. I suppose it's been strong as well, because airlines gearing up for this kind of post-pandemic. Is this going to continue, do

you think to anticipate the growth? Or do you expect this to slow down?

FAURY: There has been an acceleration very clearly, since the end of the pandemic. There is a bit of a snapback effects after a year -and-a-half

with a very low number of orders, but what we see as well is really an acceleration in the market.

There is growth. There is also more appetite for replacements of older generation planes against the need for airlines to burn less fuel and to be

more environment friendly, as the new generation of planes burn by far less fuel and emit less CO2, and that is also a new driver for airlines, and

that is one of the explanations for these very strong demand.

So we believe that the demand will remain strong moving forward, and the biggest challenge for us is to serve that demand by ramping up the

production.

SOARES: Where are you seeing the biggest demand, the biggest growth? What are you most excited about?

FAURY: Well, recently, we see a very strong demand coming from India. We were pleased to receive an order for 500 planes from Indigo during the

Paris Air Show earlier in June. That's the biggest single order of the aviation history that shows the strength of the Indian market.

We had also a very large order for single and wide bodies from Air India. So that's another Indian airline that is looking forward to growing the

fleet.

India is clearly a place of growth, Asia in general, see a very significant growth moving forward. But overall, the wave of replacements I was

mentioning before is across the world, it is across the globe. So we have a strong demand from virtually almost everywhere.

SOARES: And Etihad has brought it's A380s back into service. Do you think that the superjumbo is finally getting some much deserve loved here?

FAURY: That's indeed the preferred plane from passengers. The A380 is a fantastic plane to fly as a passenger and we are very happy to see that

most of the A380s are being brought back from storage to service after what happened during COVID. And indeed, that's very good news for us.

But it's still a program that has seen an end of its production in 2021. So we will not see more A380s going to airlines, but seeing those planes back

in the air is really, really a pleasure.

SOARES: Guillaume Faury, the CEO there of Airbus. Really appreciate you taking the time to speak to us. Mr. Faury, thank you very much.

FAURY: Thank you pleasure. Bye-bye.

SOARES: Now earnings from Alphabet and Microsoft give investors a look at the AI arms race and you can see the reaction.

Alphabet shares are higher. Much higher as you can see there, almost five- and-a-half percent. It says ad revenue from Google search is up three percent from last year despite new chatbot competitors.

Microsoft disappointing in the forward guidance. It warned that some of its AI products might not pay off until the first half of 2024. You can see

there, Microsoft shares down four-and-a-half percent, quite a different picture there for those two giants.

Well, 30 minutes from now, Facebook owner Meta is due to report earnings. The company has put the metaverse at the center of its growth strategy and

it is facing many of the same challenge there as it did in the early days of Facebook.

Women say they are facing sexual harassment and abuse in virtual reality. Our Anna Stewart digs into the story in this edition of "As Equals."

(BEGIN VIDEOTAPE)

NINA JANE PATEL, METAVERSE CONSULTANT: I put my headset on, I created my account, selected my avatar and within about 30 seconds of being in the

communal area, I had three male avatars come towards me and start verbally harassing me and sexually harassing me and then proceeded to sexually

assault my avatar.

I asked them to stop. They refused to and then a fourth avatar came to take photos.

ANNA STEWART, CNN REPORTER (voice over): In 2021, researcher, Nina Patel published a blog post detailing her experience of sexual harassment in the

metaverse.

Since then, she says she has received death threats and hateful messages.

PATEL: They were relentless in following me and were very quick to stay very close to my avatar to be able to continue with the verbal and sexual

harassment.

[15:25:00]

STEWART (voice over): Hate and harassment can be traumatizing for many victims online. But what happens when harassment follows you to the

metaverse? An online space where the lines between the virtual and the offline world are meant to be blurred.

PATEL: My experience of sexual harassment in the metaverse is the very tip of the iceberg. I know that many women have experienced some form of

misogyny through visual experiences and now in the 3D Metaverse as well.

So I know I'm not alone.

STEWART (voice over): Callum Hood is the head of Research at the Center for Countering Digital Hate. His team studies and monitors online hate and

misinformation.

But the metaverse, he says poses its own unique challenges.

CALLUM HOOD, HEAD OF RESEARCH, CENTER FOR COUNTERING DIGITAL HATE: If we listen to people who have been harassed in VR, they say it's much more like

a real-world experience of harassment than say, receiving messages on social media.

We found that in these VR spaces, people seem to be pretty aware that they are pretty anonymous, that there's not much enforcement of the rules. So

there was a sense that people were behaving perhaps much worse, and by default, being abusive to other users in a way that they wouldn't if it was

a social media account in the same name or in the real world.

STEWART (voice over): Callum and his team recorded hours of interactions in the metaverse and found this in VRChat, one of the most popular social VR

apps, an instance of harassment occurred roughly every seven minutes.

In Meta's Horizon Worlds, they recorded incidents of abuse directed at minors by adults, including sexually explicit insults, racial,

misogynistic, and homophobic harassment.

HOOD: Young users are very common in these VR spaces, but when it comes to young girls in particular, they're often targeted with a sort of virtual

harassment purely because people recognize their voice as female.

STEWART (voice over): VRChat told CNN they have put measures in place to address harassment, such as personal space tools. The company told CNN:

"We're working hard to make VRChat a safe and welcoming place for everyone. Predatory and toxic behavior has no place on our platform."

After Nina shared her story, Meta implemented default safety bubbles in Horizon Worlds. These bubbles prevent other avatars from getting too close

to your own.

The metaverse is still in its infancy, and Nina for one wants to make sure that it matures into a safe space.

PATEL: We have an opportunity today in 2023 to shape this new technology system differently so that it's not yet another technology or system that

silences women and objectifies their bodies, but becomes a technology that's fit for purpose and does more good than it does damage.

(END VIDEOTAPE)

SOARES: And that was Anna Stewart reporting and Meta did not respond to our request for comment.

The British billionaire, Joe Lewis has pleaded not guilty to charges of insider trading in New York. He secured his bail with his yacht.

With all the details, Anna Stewart will return, next.

(COMMERCIAL BREAK)

[15:30:00]

(MUSIC PLAYING)

SOARES: Joe Lewis, the British billionaire who owns Tottenham Hotspur of the English Premier League, has pleaded not guilty to insider trading at a

hearing in New York.

The 86-year old was released on a 4300 million bond. The prosecutors say it was secured by his private megaaircraft and private aircraft. Speaking out

on, Tuesday here's a little of what New York prosecutors accused Lewis of. Have a listen to this.

(BEGIN VIDEO CLIP)

DAMIAN WILLIAMS, U.S. ATTORNEY, SDNY: We allege that for years, Joe Lewis abused his access to corporate boardrooms and repeatedly provided inside

information to his romantic partners, his personal assistants, his private pilots and his friends.

Those folks then traded on that inside information and made millions of dollars in the stock market. Thanks to Lewis, those bets were a sure thing.

(END VIDEO CLIP)

SOARES: Anna Stewart is here for more.

So Anna, I just talk us through, we had a little clip, there but just talk us through about the allegations and what exactly he is accused of doing.

STEWART: It's allegations of the most extreme insider trading and fraud, really quite salacious I would say in its nature. Now he is facing charges

from the SEC, civil charges and also criminal charges.

As are two of his pilots, who are embroiled in this scandal. And SEC are also charging his former girlfriend. It's all about insider trading tips.

So Joe Lewis being a billionaire and being on the board of many, many very wealthy companies, is privileged to certain information.

For instance, say, a therapeutic firm does a clinical trial and perhaps he knew it was about to be published. And this is one of the many allegations

that he would give a tipoff to one of his friends, associates, pilots, assistants, to buy a stock before the share price rockets up with this

insider information. And that would be fraud.

(CROSSTALK)

STEWART: Just to give you an example, the two pilots that are in this case were both given by Joe Lewis, $0.5 million each, told to buy a stake in a

therapeutics, a biotech firm. The share price then rocketed up.

And just to show you some of the messages that one of the pilots sent to a friend saying, "Boss is helping us out and told us to get ASAP. All

conversations on app is encrypted, so all good. No one can ever see."

Unfortunately for the pilot, the SEC is quite good at discovering messages.

SOARES: Yes, even if they are encrypted. He has been released on bail, we said, that.

Have we heard from him?

What happens to him next?

STEWART: So Joe Lewis has been released on bail now for $300 million. That sum was secured by private yacht and a private jet. As one might expect for

a billionaire. He denies the allegations. And we do have a statement. We should read it out from his lawyer.

Which says that, "Mr. Lewis has come to the U.S. voluntarily to answer these ill-conceived charges. And we will defend him vigorously in court."

Now this trial will likely be a lengthy one. There are 19 counts against Joe Lewis at this stage, insider, fraud but also conspiracy. And each of

these holds a multiyear sentence, so potentially if found guilty he is looking at a very lengthy jail time as well.

SOARES: In terms of the legal proceedings, do we have a date on when this will start?

STEWART: We are right at the beginning, Isa. He is released on bail, I think we have got a long, long time to go.

SOARES: I'm sure we'll be talking about it for a while.

STEWART: With the details, it will be interesting.

SOARES: It will, indeed salacious, yes, that's for sure. Anna, thank you very much.

Well, the man who helped revive Barbie is moving to Gap. Mattel's COO Richard Dickson is widely credited for bringing Barbie into a new era with

new body types and ethnicities.

[15:35:00]

SOARES: He will now try to turn the clothing company around. Gap has been a problem child in the retail world. It's in the midst of a years-long

sales slump and has been looking for a new CEO since last July.

Nathaniel Meyersohn is in New York. For more.

So Nathaniel, good to see, you. Just tell us about Richard Dickinson (sic), this man, of course, as we said there, revived Barbie.

What can he do here for Mattel (sic)?

NATHANIEL MEYERSOHN, CNN BUSINESS CORRESPONDENT: Yes, Isa, so Gap is really trying to tap into some of that Barbie fever that we are seeing

there right now. Everyone is going to see "Barbie" at the movies, the memorabilia and merchandise is everywhere. And so Gap is really hoping that

it can pay off right now.

Now look, it may seem like a surprise but Dickson is a retail veteran. He worked at Bloomingdales, also Nine West, has some experience here. And Gap

also has a recent partnership with Mattel for some Barbie merchandise. And so it is not an entirely unknown partnership here.

SOARES: Just talk to us about, Barbie (sic) I, mean about Gap, pardon me. In the break I was talking to (INAUDIBLE) trying to think here, when was

the last time I saw a Gap store or anything from Gap?

How can you replicate the magic that he had with Mattel and with Barbie, to Gap?

What is he hoping to do here?

MEYERSOHN: So it's really going to be an uphill climb here. Gap has struggled for years, they face so much competition, think of Amazon,

Target, Walmart, also all the fast fashion H&M, look at Shein right now. They are just crushing Gap.

So it's really going to be a struggle for Dickson. But there have been some brands, some nostalgic brands that have done well. You think of

Abercrombie. Millennials are really into Abercrombie these days. That may seem like a surprise.

So maybe they can tap into some of that Gap magic as well. Wall Street is optimistic. The shares of Gap rose about 6 percent on the news of the CEO.

But it's going to be an uphill climb. Just so much competition in retail right now.

SOARES: Indeed, Nathaniel, appreciate it, thank you very much.

Lionel Messi is proving his worth, leading his club Inter Miami to a 4-0 victory over Atlanta United last night. The soccer star has helped make

tickets for his club the hottest in town.

And just to give you an idea of, that on average, a resale ticket to his debut game, about $700. That is even more than Beyonce. No one comes close

to Taylor Swift though. Her tickets average $1,800. The Messi mania is part of a larger wave of stock enthusiasm in the United States. CNN's Andy

Scholes has the story for you.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: USA. USA. USA.

UNIDENTIFIED FEMALE: That's pretty much sums it up.

ANDY SCHOLES, CNN SPORT CORRESPONDENT: U.S. Soccer fans are confident.

UNIDENTIFIED MALE: I am predicting, they absolutely threepeat.

SCHOLES: And ready to celebrate the World Cup's first ever back to back to back champion. But the team is not getting ahead of themselves as they

prepare for a rematch of the 2019 championship game against the Netherlands.

UNIDENTIFIED FEMALE: This is going to be an incredibly difficult matchup, very challenging. We know we have to be at our best.

The U.S. Women's quest for history abroad happening at the same time as the greatest player ever, Lionel Messi, is taking his talents to South Beach.

UNIDENTIFIED MALE: Messi.

SCHOLES: After a Hollywood debut where he scored the winning goal in front of the likes of LeBron, Serena and Kim Kardashian, Messi following that up

with two goals in the first 22 minutes Tuesday night, wowing the home crowd, leading Inter Miami to a 4-0 win over Atlanta United.

UNIDENTIFIED MALE: He has done it again, Lionel Messi.

SCHOLES: Messi mania completely taking over, selling out of stadiums across the country.

UNIDENTIFIED MALE: Prices are way up. They are about 10 and 12 times what a normal MLS game would be selling for.

Never seen anything like this, to have the best player in the world come over in the prime of their career, to play in America.

There has never been anything like that.

SCHOLES: His latest soccer boom comes as many Americans have fallen in love with Wrexham, a British team thousands of miles away, who are now an

unlikely box office smash, thanks to "Deadpool' actor Ryan Reynolds and "It's Always Sunny in Philadelphia's" Rob McElhenney, who purchased the

team in 2020 and have invested $3.7 million into the club.

Ahead of season two of their FX show, "Welcome to Wrexham," the team is touring the U.S. after earning promotion to a higher league last season.

RYAN REYNOLDS, CO-OWNER, WREXHAM FC: People said at the beginning, why Wrexham, why Wrexham?

This is exactly why Wrexham.

SCOTT: And Reynolds and McElhenney are dreaming of even more.

REYNOLDS: I love just hearing friends of mine, people that, are you know, some are I'm showbiz, some are not in showbiz, (INAUDIBLE) just saying the

words that we're Wrexham now, like, it's just a normal part of the lexicon.

[15:40:00]

REYNOLDS: I just think it is so cool.

ROB MCELHENNEY, ACTOR: I can ask more about this than any thing in show business, that's for sure.

REYNOLDS: Yes.

(END VIDEOTAPE)

SOARES: And that is QUEST MEANS BUSINESS, we are back at the top of the hour, 20 minutes or so as we make a dash for the closing bell. Up next, in

the, meantime "LIVING GOLF."

(MUSIC PLAYING)

(COMMERCIAL BREAK)

[15:43:12]

(MUSIC PLAYING)

(LIVING GOLF)

(MUSIC PLAYING)

(COMMERCIAL BREAK)

[15:58:30]

(MUSIC PLAYING)

SOARES: Hello, I am Isa Soares, it is the dash to the closing bell. Just two minutes away. The Federal Reserve has hiked interest rates by a quarter

percent, as widely expected. Fed chair Jerome Powell said the central bank is no longer forecasting a recession. He also said rate cuts are unlikely

this year.

His comments gave the Dow a boost, followed by a cold shower, it's a few points higher now. A remarkable 13 straight days in the green. And it was a

much higher in the last hour; that has come down a bit.

S&P and the Nasdaq are somewhat flat, so turned around in the last few minutes. Citi's chief U.S. economist joined me to talk about the Fed's

inflation fight and whether the central bank needs to raise rates even higher.

(BEGIN VIDEO CLIP)

HOLLENHORST: If what you want to see is core inflation slow down, that strong demand for services with some pushing of prices slow down, house

prices slow down.

You usually you need more of a cooling of the economy. So I think that is the medium term issue that the Fed may be facing here in terms of our

policy rates really high enough.

And what Chair Powell is trying to go is to say is we will just keep policy rates at these levels for longer, credit conditions will continue to

tighten. Maybe in time that will bring down core inflation. So I think there still is a real discussion about whether we are going to get core

inflation back to 2 percent.

(END VIDEO CLIP)

SOARES: And if we have a look at the Dow and how some of the shares there are doing, Boeing has popped on strong, quarterly results. It is delivering

more commercial aircraft. Microsoft, as you can see, is down just over 3.5 percent. It said some AI investments might not pay off until next year.

You can see Boeing doing pretty well and Home Depot also doing well. That is your dash to the bell, I am Isa Soares.

END