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Quest Means Business
Federal Reserve Keeps Benchmark Rate At 5.25 Percent; Greek PM: Climate Change Could Help Tourism; UK PM Sunak Announces Climate Initiative Rollbacks; Biden And Netanyahu Meet At UNGA; U.S. Markets Fall On Fed Outlook; Dash To The Bell. Aired 3-4p ET
Aired September 20, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:35]
RICHARD QUEST, CNN INTERNATIONAL HOST: A quick look at the markets and how they are trading. There is an hour left to go on Wall Street. We're down
109 -- sorry, we're up 111 points so far today. The Fed is obviously the main reason.
The markets and the events of the day: The Fed holds steady this month, and forecast one more rate hike before the year is out.
The UK Prime Minister faces a torrent of criticism over plans to delay climate targets.
And Paris rolls out the red carpet for the King and Queen. We'll be live in Paris.
We are now live in New York. It is Wednesday, September the 20th. I'm Richard Quest, of course. I mean business.
Good evening.
The Federal Reserve has hit the pause button in its efforts to bring down US inflation. Well, the efforts haven't changed, but the central bank
decided to keep its benchmark rate at five-and-a-quarter percent for the moment. There is evidence that the previous increases are cooling the
economy.
However, a majority of the committee even allowing for this pause thinks more tightening is going to be needed. So most participants expect rates
will go higher. The dot-plot as we say, shows them expecting one or two more rate hikes.
Just a short while ago, Chairman Jerome Powell echoed the view that more might be necessary.
(BEGIN VIDEO CLIP)
JEROME POWELL, US FEDERAL RESERVE CHAIRMAN: Today, we decided to leave our policy interest rate unchanged and to continue to reduce our securities
holdings.
We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to our two percent
goal over time.
(END VIDEO CLIP)
QUEST: Matt Egan is with me. So they did what was expected, but nobody believes that it's the end. I guess this is a sort of a case of a pause,
hoping they may not need to, but expecting they will.
MATT EGAN, CNN REPORTER: I think that's right, Richard, you know, it strikes me that investors are kind of like children on a very long car
ride. And they just keep saying, are we there yet? Are we there yet? Are we there yet? And of course, Jerome Powell is like the dad saying, please, be
patient. We're not there yet. But we're almost there.
Of course, Richard, you and I know that central bank policy, it is not an exact science. So what Powell was really saying is we think we're almost
there, but we're not quite sure and we hope we'll know when we get there. And so there's just a lot of uncertainty here and I think Powell, he
acknowledged that, that some of this is kind of out of their control.
QUEST: One of the things I took listening to him was he said, and it was almost a throwaway comment, when he said that we've done a lot already and
we haven't yet seen the full effect. And that to me, says he is expecting - - he is expecting that the rate rises so far, to increase the effect.
EGAN: Right. Because all of this inflation fighting medicine does not hit the economy immediately. We talk about it as soon as it happens, the market
reaction is immediate, but the actual economic impact takes time.
And so he is alluding to that lagged impact and he is saying that there is going to be more negative pressure on the economy and hopefully that helps
to bring down inflation. But when we talk about the dot-plot and some of these projections, I do think we have to take it all with a grain of salt.
I mean, there are a lot of wildcards right now, right? We have this potential government shutdown, we have this unprecedented auto strike, we
have student debt payments coming back, higher energy prices, and those are just the known unknowns. So there's a lot here that could change whether or
not the Fed raises interest rates one more time, two more times, or maybe they're done all together.
[15:05:00]
QUEST: The other factor into all of this, which I talk about in that statement is the tighter conditions on credit and banking, as a result of
the mini banking crisis that we've had.
Now, it's getting more difficult to borrow money, which in of itself, is an implied tightening.
EGAN: Right. That's exactly what the Fed wants to see. Now, the banking crisis, thankfully has cooled off, right, and so we're not talking about a
dramatic impact to lending conditions, but obviously it has gotten more expensive to borrow.
And the fact that the Fed is changing their outlook for next year's rate is very important, right? Before today, the Fed was pricing in and was
penciling in four interest rate cuts next year. Now, they only see two. That is a big difference. That hints that this higher for longer idea, that
borrowing costs are going to stay at these relatively high levels for a longer period of time.
QUEST: Matt Egan, thank you, sir.
So Fireman Fed is tending a delicate job. After an inflation, the fires may be dying off towards the embers, we discussed this last week. But as
always, when you douse a fire, you have to make sure you get rid of every last ember. Don't risk a new fire seems to be the way to which water, the
economy is soaked, mounting risks, for example, Brent oil $93.00 a barrel, the UAW and the Hollywood strikes, questionable whether there will be more
and that government shutdown 10 days away, potentially is causing concern.
Ken Fisher is the head of Fisher Investments. Ken is with me.
Ken, first of all, do you think the Fed was right to pause?
KEN FISHER, EXECUTIVE OFFICER, FISHER INVESTMENTS: Thanks for having me on, Richard, as always.
I do think they were right to pause because they don't know any better, and that's not a criticism. But when you don't know any better, not doing
something is usually the right thing to do. And the reality is, they usually don't know what to do. That's the part about central banking that
most people don't understand
Let me point out said simply, in May of 2022, Jerome Powell said, sort of like he said today, but differently. We aren't even considering 75 basis
point interest rate hikes mean three-quarters of one percent, and then the next month, they did 75 basis points, the month after that they did 75
basis points. They skipped a month and did 75 basis points and 75 basis points.
They don't know what they're going to do and they don't know what they're going to do next year. And they might do this, they might do that and
getting overly excited about it is a waste of time and pointless.
QUEST: Yes, but it keeps me in a job, which is one way of looking at it. No, Ken, do you think there is enough monetary tightening now? Because
we've still got to see the effect. Do you think there's been enough to tamp down inflation below to two percent?
FISHER: Let me put it this way. A Yes. B. The reason is, because none of this has ever had a darn thing to do with where they set interest rates.
The fundamental function that's important and only what's important is what's the growth in the quantity of money versus the growth over time in
the economy because inflation is too much money chasing too few goods.
And the fact is the growth in the quantity of money around the world and in the United States of America that the Central Bank and the Federal Reserve
focuses on has been reduced to a zero growth rate.
With a zero growth rate in the quantity of money, inflation is going to take care of itself. This notion that is so widely articulated, that you've
got to hurt the economy to make inflation come down was proven nonsense in the 1960s and has never been learned.
You remember the phrase, Richard, the Phillips Curve, and Milton Friedman proved the Phillips Curve was wrong in 1968, and when I went to school once
upon a time right after that, they were still teaching the Phillips Curve, they still teach this concept today, it was wrong then, it is wrong now,
it's been wrong forever and they still keep thinking we've got to hurt the economy to make inflation come down. All you've got to do is have the
quantity of money not grow.
QUEST: The market and how it is reacting is also an important part of this particularly, if I think about the people at Fisher Investments, all the
401 (k)s, all the investments, people are -- myself, we are -- I don't want to say waiting to get back to the races, but we were waiting to see some
good gains.
[15:10:05]
FISHER: Well, let's say that differently A. Yes, and you know my primary focus is on the broader markets, and the reality is, since last October,
when they hadn't finished raising rates yet, the market has been up on a US and global basis pretty nicely led by higher quality growth. And the fact
is, it's a bull market. It's a bull market at the start -- at the beginning of last October, it's 11 months old now.
And throughout that we've consistently climbed the wall of worry that bull markets legendarily climb, as people can't quite get themselves to believe
that it's real. And they keep trying to say this -- I mean, how many times if we focused on things like in America, which is what you're focused on
today, the government might shut down. Didn't we just do that a little while ago? And didn't that amount to nothing?
And how many times in our lifetimes have we gone there and had an amount to nothing even when they shut the government down and we've learned that
shutting the government down in America doesn't mean that the government in America gets shut down, that something else really happens, which is that
most of the government goes on as normal, and a few relatively unimportant things don't happen.
The fact is, this goes on and on and on and people keep looking at those fears because they can't quite believe that it's not as bad as they feared
it was a year ago.
QUEST: Ken Fisher put the fears away. I'm grateful to you, sir. As always, thank you.
FISHER: Thanks for having me, Richard, always.
QUEST: Proportionate and realistic, or a net zero U-turn. It is the debate in the UK tonight, after the prime minister announced a rollback on climate
initiatives. The new course coming from Number 10.
(COMMERCIAL BREAK)
QUEST: You know that old saying that if you end up with lemons make lemonade. Well, the Greek government has appeared to find at least a
benefit in some shape or form of climate change.
The prime minister says rising temperatures will extend the peak tourism season from March until November. However, that's not necessarily the most
important aspect. Instead, he's urging the EU to spend more on adapting to climate change. This year, Greece grappled with both wildfires and floods
and the prime minister told me at the same time, the economy is strong.
[15:15:00]
(BEGIN VIDEOTAPE)
KYRIAKOS MITSOTAKIS, GREEK PRIME MINISTER: Well Richard, this summer has felt a little bit like you know the two-faced Roman god, Janus. On the one
hand, the economy is performing extremely well, after 13 years, we finally managed to get to upgrade to investment grade status, we're going much
faster than the Eurozone average. We will have a record season in terms of tourism. And on the other hand, as you pointed out, we were struck up by
climate related disasters, first a catastrophic fire, and then an even more catastrophic flood, the largest flood we've ever seen in Greece.
And as you pointed out, indeed, I will be banging my fist on the table to argue that we need to spend more money as a European Union on issues
related to adaptation. We're spending trillions, literally trillions over the next decade, on mitigation, and rightly so. We need to bring down our
greenhouse gases and bring Europe to carbon neutrality by 2050.
But these climate disasters are affecting our lives today as we speak. And frankly, the money that the European Union is putting on the table to
support European countries facing these types of crisis is extremely, extremely limited. So we need a proper balance between mitigation and
adaptation.
And again, this is not just an issue related to the southern countries of the European Union. I think we need a global sort of adaptation alliance to
share best practices and to argue that climate change is already happening and we need to address it today.
QUEST: Right, but it isn't your fear -- I realized it might be somewhere else, but that the southern European countries could cease to be so
attractive as tourist destinations if for every year, the temperature starts getting into the 40s and it becomes unpleasant and unbearable, then
you do end up with your very core industry, tourism being at risk.
MITSOTAKIS: You know, I hear this line of thought, Richard, I don't necessarily agree, and I'll explain -- I'll explain why. I mean, there will
always be lots of people who want to enjoy, you know, the heat of the Mediterranean summer and will come to Greece or to other southern European
countries in July or in August.
If anything, I think what is happening with our tourism industry is that we're actually able to extend the season and we are able to communicate to
people that it is extremely pleasant to come to Greece in March in April, or in October, in November, this is actually happening.
So in that sense, you know, the climate crisis could be an opportunity for us to pitch Greece not just as a destination where people can come in July
and August. But having said that, we need to address, you know, the fact that, you know, the summers are getting hotter, the you know, the waters
are getting hotter. But you know, trust me, Richard, you've been to Greece many times, which is still an incredibly attractive destination, even in
July, and August, and these extreme weather events, they are happening, they are affecting, you know, our local citizens, but they're not derailing
our main tourism industry.
(END VIDEOTAPE)
QUEST: The Greek prime minister talking to me earlier.
Now, the PM is one of a number of world leaders in New York, of course, reaffirming their various climate commitments. In contrast, the British
prime minister, Rishi Sunak, is now having to defend what critics are calling a net zero U-turn.
He publicly announced a number of rollbacks today, which the PM says are meant to ease the economic burden of the country's green transition.
(BEGIN VIDEO CLIP)
RISHI SUNAK, BRITISH PRIME MINISTER: Now, I believe deeply that when you ask most people about climate change, they want to do the right thing. They
are even prepared to make sacrifices, but it cannot be right for Westminster to impose such significant costs on working people, especially
those who are already struggling to make ends meet.
(END VIDEO CLIP)
QUEST: Anna Stewart is following it for us tonight. So I sort of know what the prime minister is saying. He is basically saying let's be adult about
this, we'll keep the main target, but how we get there is going to be different. So why is everyone really hot under the collar about it?
ANNA STEWART, CNN REPORTER: Well, I think a lot of people are upset that this is the UK simply not delivering as much as it possibly could when it
comes to reducing emissions. But Rishi Sunak said, there are two key reasons he was doing this. Number one was the fact that the UK has done
better than any country in the G7 at reducing emissions, a much faster reduction than any of the other G7 nations.
Secondly, he says that this is an issue for people who cannot afford to buy a new electric vehicle or a new boiler or having to insulate their home if
they rent it out. And that these targets needed to be extended simply because people are already paying so much more from inflation, from energy
bills going up, from mortgages going up, from interest rates, and so on. So those are the key reasons.
But of course, this is very upsetting if you were an automaker, and you had invested millions or billions of dollars to be ready for a 2030 target and
it's got pushed by five years.
[15:20:01]
QUEST: Okay, so pragmatic, proportionate, realistic. The new approach to reaching net zero is the new slogan.
STEWART: It's not the sexiest slogan I've heard for politics. I mean, you have to also question whether there is a third reason why Rishi Sunak has
watered down some of these green policies, and that this is the starting gun of an election campaign, and certainly with a slogan like that, and
with some of the words used in the delivery, some of the measures he mentioned that his government is against, I mean, a lot was talked about,
Richard about sorting rubbish into seven different bins.
This government rejects it, it wasn't even a policy. So, you just wonder whether he really is trying very much to appeal to certain voters,
particularly that red wall you may remember from the last election where the Conservatives won back, big Labour heartland seats.
I think this is the beginning of the election.
QUEST: Good hell. I love elections. I love elections.
STEWART: I hope they improve the slogan though -- pragmatic, proportionate, realistic, pragmatic.
QUEST: I look forward to being on the election trail with you. Thank you.
It's curious timing for what the prime minister has done. Today is the United Nations Climate Ambition Summit. Business leaders are joining
politicians to discuss how to limit further damage from the climate crisis.
The Allianz CEO is Oliver Bate, he has addressed the Summit today. He is with me now.
Oliver, first of all, you know, I'm not taking you into British politics too far, but do you think it's curious what the British prime minister
announced today?
OLIVER BATE, CEO, ALLIANZ: I don't think it's appropriate as a German that I comment on what the UK prime minister does, but in general, I would say
delaying action is increasing cost massively for the next few years and beyond, and we've been pushing the can down the road for too long. So we
need action now, but that has nothing to do with the UK alone. It applies to Germany and many other countries as well.
QUEST: The issue was, as you and I have discussed before, all roads when it comes to climate change to a certain extent, besides political will and
commitment, all roads lead to climate financing and I know you're heavily involved in that. And you believe that there's enough money, it's just how
it's distributed, and how its raised.
BATE: Exactly right. So there isn't a lack of money. It's a lack of sort of incentivizing the markets properly, to put the money where the action is
supposed to be. And as we've just heard, it's not just in the UK, but in many countries where one part of the political sphere says one thing and
another one says something completely different and actually tries to fight the investment into battling climate change, which is quite stunning, it
happens also here in the United States.
QUEST: Right, when you --
BATE: So we are ready and we will do that, by the way and fortunately, today we were the only company present in the climate debate from the
private sector. So it was very important to show how we are reallocating our capital to actually meet the net zero requirements of 2050 and much
earlier to really make progress 2025 and 2030.
QUEST: Every CEO I speak to says it's high on their agenda, but they complain either about shifting goalposts or difficulty of accessing
capital, or they simply don't understand what needs to be done.
BATE: I think people need to get a little bit more practical, Richard, we talk too much about new targets, higher targets, higher ambitions, as we've
just learned in the case, when we put industry in motion, say for example by 2030, we don't want any more combustion engine cars, billions of
capital, as you've mentioned, have been allocated to do so already. And we now need to follow up with these things.
The worst thing that can happen for the economy is we continuously change the targets and then people stop investing in the transition. That's the
worst outcome.
QUEST: What was your main message today?
BATE: The first one, I think, is when we started the Net-Zero Asset Owner Alliance in 2019 in the same building that we were talking today, the world
was a totally different place, Richard. You know, we had money didn't cost anything. China was powering growth in the world. You know, for Europe, we
got cheap gas and energy from the east -- all of that's gone and we have inflation back.
So it's no surprise that politicians find climate change financing even more difficult than it was a few years ago and the old problems we had, you
know, how do we manage migration? How do we fund affordable health care, affordable housing and have a proper pension have not gone away?
So now it is really hard to make sure we focus on the thing that will really impact at least our children's life and make this planet
uninhabitable, but the bigger the short term problems are, the harder it is to manage the economy for the long run.
[15:25:02]
QUEST: I just always feel at the end of the day, we make miniscule progress. Now, I'm sure there will be viewers who will write to me who will
say, no look at the amount of progress that's been made since X, Y, Z. But we are failing on the Paris commitments, we've got a COP 28 coming ahead,
where there are concerns that fossil fuels will still be far more important. We've got a German situation where, you know, yes, they did very
well in Germany to wean off Russian oil and gas, but there is so much more to be done.
BATE: Yes, there is always so much more to be done. I'm an optimist. And again, Germany has only 1.6 percent of, you know, CO2 emissions globally,
we're still fully committed to make our contribution to what has to be done. It's really more important that the European community overall and we
have a program, it's really important, Richard, to focus on the practical things.
And from our political leaders, we need less fear mongering, but more encouragement of change, we need to celebrate more successes on how energy
transition can be done and we need less regulation and bureaucracy and you know, thousands of papers from the Commission in Brussels on what we ought
to be doing rather than deploying capital and building the electricity grids, building renewable energy and it is happening.
It is happening. It is not true that it is not happening. We can show it to you for what we do every day, and it's working.
QUEST: You just wish it would to go a bit faster, I suppose.
BATE: Yes, that's very true. And it's very true that we all are very impatient, but the key thing, this is a marathon, this is not a sprint, and
the scarce thing in the community is really resilience, which is something very important in our industry, and as you know, to do this over the long
haul, and not give up. This is the key thing that we should not really let go of.
Whatever politicians do for the short term for like, this is the weakness of democracy. You know, politicians need to get reelected, and they do
whatever they have to do to do that and that is often not consistent in the long run.
But it's not just politics, in the capital markets, we have the same nonsense. You know, we incentivize to do evermore buybacks and capital
returns rather than focusing on investing in higher growth. So we'll have the issues everywhere and we need to work on it.
QUEST: Oliver, I'm very glad you're here with us today. I'm grateful to you always, sir. Thank you. Thank you, Richard.
QUEST: The mining sector in Africa is undergoing massive change as well. The continent is embracing cashless transactions, and one of the firms
leading the charge is South Africa's largest financial institution, the Standard Bank Group.
Eleni Giokos spoke to his chief executive to discuss the digital revolution. It's today's "Connecting Africa."
(BEGIN VIDEOTAPE)
SIM TSHABALALA, CEO, STANDARD BANK: Now is a time that is most exciting for the banking industry. Off the back of an increase in cell phone
subscriptions, you know, there's 840 million people that are now subscribed, that progress is continuing with more internet connectivity,
more fiber being rolled out by the cell phone companies on the African continent.
The consequence of that is that the African continent is in a position to leapfrog and banks operating on the continent are using that capability and
that connectivity to meet the needs of their clients, to pay, to move money around, to invest, and indeed to create wealth and pass it on to future
generations.
ELENI GIOKOS, CNN INTERNATIONAL HOST: How much uptake have you seen of the smaller guys coming in and seeking financial services, even if it's just at
small scale, because that is the start, right? That is the start of including an enormous community across the continent.
TSHABALALA: There's the new entrants, the small traders, that you and I would see wherever we travel on our beloved continent.
These traders require the ability to receive cash or receive payments for the goods that they sell in the services that they provide. They also want
to make payments to their suppliers and their ability to serve that clients with points of sale, with lending propositions, with core propositions is
something quite exciting and it is central to how we at Standard Bank are competing on the continent.
GIOKOS: And part of what you're telling me really ties in beautifully with the efforts of the continental free trade area and the vision, right?
Because connecting the continent means getting everyone involved in some way in the economic prosperity on the continent, being able to trade
between ourselves on the continents.
How important are banks going to be in bringing to reality the AFCFTA.
TSHABALALA: Eleni, again, you hit the nail on the head, and I agree entirely with you. The African Continental Free Trade Area is going to be a
game changer for our continent.
Firstly, it's going to reduce poverty. It is going to increase incomes. It is going to increase the ability of people, ideas, knowledge, and capital
to move between countries, therefore, it's going to increase economic activity. And I'm hoping you get a sense from me as a pan-Africanist that
this shall be the African century. It is incredibly exciting.
(END VIDEOTAPE)
QUEST: Now, the saying is -- mieux vaut tard que jamais -- as he might have said, well, that would have been President Macron, better late than never.
King Charles is in France, a trip that had been postponed -- a look at his itinerary coming up next.
QUEST MEANS BUSINESS. Bienvenu.
(COMMERCIAL BREAK)
[15:33:50] (MUSIC PLAYING)
QUEST: President Biden and prime minister Netanyahu, they met today on the sidelines of the U.N. General Assembly. The two men have had a strained
relationship and that might be putting it roundly.
Among the differences, President Biden has been highly critical of Israel's proposed judicial reforms. Reference that issue as the two leaders outlined
they topics they plan to cover.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: We discussed some of the hard issues. There's no polling democratic values that lie at the heart of
our partnership, including checks and balances in our systems and preserving a path to a negotiated two-state solution and ensuring that Iran
never, never acquires a nuclear weapon.
BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: I believe that working together, we can make history and create a better future for the region and
beyond. And also by working together, we can confront those forces that threaten that future, none more so than Iran.
(END VIDEO CLIP)
QUEST: Kayla Tausche is with me now.
The two men are talking a different language.
[15:35:00]
KAYLA TAUSCHE, CNN SENIOR WHITE HOUSE CORRESPONDENT: They are but they are talking in a conversation that is based foundationally, Richard, on a
decades-long friendship.
President Biden talking about the hard issues the two will be discussing on checks and balances, which is a nod to judicial overhaul, with which the
White House still has deep unease.
But a senior administration official said the conversation was very candid, very constructive and very productive. Their decades-long friendship sort
of providing a sense of ease, where there is deep unease over that judicial reform.
And to that end, this official telling reporters that the White House is, since coming out of this meeting, is that there's an understanding that
there needs to be a way forward there that involves compromise.
Now frosty as relations may be between the two longtime allies, there were some areas of common ground for them to discuss. Notably, the pursuit of
normalization of relations between Israel and Saudi Arabia. There is still much work to do and many details still to be worked out.
But there was an assessment by officials, who were familiar with the meeting, that, you know, that there was progress made and there would be
some sort of outcome in the future.
QUEST: OK. So give me an idea; from the White House point of view, from your understanding and your assessment of the situation, how significant is
it for Biden to try and get that deal with Saudi/Israel done?
I mean, there are talks on various security guarantees, et cetera, et cetera.
But is this considered a priority by the White House?
TAUSCHE: It is considered a priority and it's something for which the work has been underway for several months, building on some work that was begun
under the Trump administration.
And top officials, including national security adviser Jake Sullivan, have been hard at work with multiple visits to Saudi Arabia, in particular, to
try to advance some of the details of this pact.
You mentioned the details of any security guarantee, which they acknowledge is still fairly far off but in the works. It does appear that it is
something that President Biden wants to be part of his legacy and something he wants to be able to say, that box has been checked.
QUEST: Good to see you. Thank you.
A little later than planned but King Charles and Queen Camilla are finally making their visit to France. It's the first time the king has been there
as monarch. The three-day trip was supposed to happen in March but the violent protest over pension reform forced France to postpone.
Now President Macron is leaving no stone unturned to welcome King Charles. It's a full packed itinerary, including a reception in parts of (ph)
Versailles. Our royal correspondent Max Foster is fortunate to be there in person.
(BEGIN VIDEOTAPE)
MAX FOSTER, CNN LONDON CORRESPONDENT: The red carpet well and truly rolled out for King Charles and Queen Camilla during a state visit to France. I
was watching them on the red carpet earlier on with President Macron and his wife. And there's definitely a chemistry there.
They are getting on. It seemed like a really warm relationship. And that's what diplomats on both sides wanted to see.
Huge amount of tension between the U.K. and France in recent years, post Brexit. Also during Boris Johnson's tenure, he wasn't necessarily very
popular here and you didn't really get the sense that Macron and Johnson got on at all.
But Charles and Macron clearly were getting on. There was a big ceremonial state welcome at the Arc de Triomphe, a procession down the Champs-Elysees,
roads closed off, everything being thrown at this.
Macron wants this to work. He had to postpone the previous visit because of demonstrations over pension reforms in France. That was embarrassing for
him. He wants this visit to work.
In Versailles, a lavish state banquet attended by the elites of the United Kingdom and France. That's a big honor for the king but also there are some
people in France who think it's completely appropriate during a cost of living crisis.
The biggest honor probably being afforded to King Charles will be on Thursday at the senate. He's going to be invited to speak on the senate
floor, address the senators. That hasn't been afforded to any other king or queen from the United Kingdom ever.
So that's a big moment for King Charles. He's expected to speak French there; we'll see how well that goes. But a series of events over three
days. Both sides, the British and the French, really want this to work. They want to emphasize the deep ties, the historic ties between the two
countries -- Max Foster, CNN, Paris, France.
(END VIDEOTAPE)
QUEST: I'm looking forward to seeing the menu for that dinner tonight. Somebody sent me the menu. I'm a great lover of French food.
And that's QUEST MEANS BUSINESS. Let me show you the markets. There you go. Well, dear; given up all the gains of the day and I can only assume that's
because of the hawkish tone still by Jay Powell.
[15:40:00]
QUEST: The Nasdaq is bearing the brunt of the comments. I mean, it's a dot plot. We know rates are going up. Another once or twice but I think that
that is the outlook from the Fed that's really driven the nails into today's market.
I'll be back the top of the hour. We'll make a dash for the closing bell. It will be fascinating to see how that goes in the next 20 minutes.
"MARKETPLACE EUROPE" is next.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
[15:58:14]
(MUSIC PLAYING)
QUEST: Hello, I'm Richard Quest. Together, we have a dash to the closing bell and it's two minutes away.
A majority of Fed policymakers think that rates will go up again this year, even though the Fed didn't move on this last meeting. And that's rattled
investors, as the Dow has given up all of its gains and more.
The S&P is lower; tech stocks are down as well. The Nasdaq is set to close down nearly 1.50 percent. Most investors expected that the Fed would hold
steady on rates, which is what they did. But it's the central bank's projections, the so-called dot plot, that sent the markets lower. Ken
Fisher told me people should keep those forecasts in perspective.
(BEGIN VIDEO CLIP)
FISHER: In May of 2022, Jerome Powell said, sort of like he said today but differently, we aren't even considering 75 basis point interest rate hikes,
meaning three-quarters of 1 percent.
And then the next month they did 75 basis points; the month after that they did 75 basis points and 75 basis points. They skipped a month and did 75
basis points and 75 basis points.
They don't know what they're going to do and they don't know what they're going to do next year. And they might do this, they might do that. And
getting overly excited about it is a waste of time and pointless.
(END VIDEO CLIP)
QUEST: The Dow components show the day. A couple of pharma stocks on top with Amgen and UnitedHealth. Tech stocks are lagging right at the bottom.
Microsoft near the bottom. Intel, you don't even see Intel off but look at that, down 4 percent. Microsoft's head of gaming department has reportedly
discussed buying Nintendo.
Intel is down sharply. One analyst says the company is late to the AI party. But for somebody like Intel, 4.50 percent is quite dramatic.
Now that is the dash to the closing bell. The bell is ringing on Wall Street. Whatever you're up to in the hours ahead, I hope it's profitable.
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