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Quest Means Business
Fed Holds Rates Steady for Fourth Straight Meeting; Top CEOs Face Grilling at Online Child Safety Hearing; Delaware Judge Blocks Elon Musk's $15 Billion Tesla Pay Package; FBI Director Issues Strong Warning About Chinese Hacker; Christine Lagarde: We Need Experts Outside of Economics. Aired 3-4p ET
Aired January 31, 2024 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:31]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": The chair of the Fed is giving his press conference after the decision by the FOMC.
Look at the market and you'll see how they've reacted to the decision to leave rates where they are, but it is the comments that we are talking
about, the techs earnings are also dragging down the NASDAQ, which is showing the largest losses of the day.
We will talk about it in just a moment.
The main events that we are following: Mark Zuckerberg apologizes to families hurt by social media, as he and fellow CEOs face a grilling in the
US Senate. The Fed says it's not ready to cut rates, we'll talk about that.
And the judge throws out Elon Musk's massive billion dollar payday.
I'm back in New York and we are live in the Big Apple. It is Wednesday, last day of January. I'm Richard Quest and yes, I mean business.
Good evening.
We are juggling the stories this evening because obviously, important news that the Federal Reserve has spoken not only leaving US interest rates
unchanged for the fourth month, that was expected, but what the Fed Chair said and the statement from the FOMC about requiring more confidence before
cutting rates. We'll get to all of that in just one second.
I must begin though with fierce criticism and an extraordinary apology from Mark Zuckerberg of Meta on Capitol Hill. The chief executive spoke along
other CEOs, it was a Senate hearing on protecting children on social media. And the CEOs faced harsh questions from both sides of the aisle. Families
of child victims of abuse sat behind them.
Here is what happened when the Republican Senator Josh Hawley asked Mr. Zuckerberg, if he wanted or wished to address them.
(BEGIN VIDEO CLIP)
SEN. JOSH HAWLEY (R-MO):There's families of victims here today. Have you apologized to the victims? Would you like to do so now?
MARK ZUCKERBERG, CEO, META: Well --
HAWLEY: They're here. You're on national television. Would you like now to apologize to the victims who have been harmed by your platform. Show him
the pictures. Would you like to apologize for what you've done to these good people?
ZUCKERBERG: I'm sorry (inaudible). It is terrible knowing that to go through the things that your families have suffered, and this is why we
invested so much and are going to continue (inaudible) efforts to make sure that no one has to go through the types of things that your families have
had to suffer.
(END VIDEO CLIP)
QUEST: Rebecca Kern is POLITICO's tech policy reporter. She is with me from Capitol Hill.
It's good theater, which is I suppose worthy in itself, but what's the fundamental accusation here?
REBECCA KERN, TECH POLICY REPORTER, POLITICO: I think these senators all feel like the tech CEOs are not taking responsibility for some of the
content that is being pushed upon young kids and teens on their platforms, and they are not doing enough to take that content down, even Hawley wants
Zuckerberg to provide money in terms of disbursements to families who have lost children due to suicide, because of bullying and harmful content on
the platforms.
QUEST: Now, you deal with this on a daily basis and you cover this. How far do you think dispassionately the companies, the social media companies
are failing in their duty in a sense of, is there much more they could and should be doing?
KERN: To be fair, there is tons of content and it is all largely third party generated content put on their platform. So they do have a big
challenge ahead of themselves, but they didn't do themselves any favors last year, particularly Meta and X formerly, Twitter, by laying off a
number of content moderators who dealt with reviewing harmful content.
So that was not something that was helpful and that was thrown out against them today in the hearing and granted, they don't also want child sexual
abuse material on their platforms either.
[15:05:03]
It is not something they support. It's just, there could be more invested and more staff put on the issue is what lawmakers are pushing for. But
other than asking for it, lawmakers don't have a lot of authority to just say this because there are no laws mandating it.
QUEST: Thank you for joining us. We'll talk more. I appreciate your time. Thank you.
Stephen Balkam is the founder and CEO of the Family Online Safety Institute. He joins me now.
When you saw Zuckerberg's apology. What did you make of it?
STEPHEN BALKAM, FOUNDER AND CEO, FAMILY ONLINE SAFETY INSTITUTE: It was very moving. In fact, at the very beginning, when the CEOs came in,
everyone stood up and many of the families held photographs of their loved ones aloft, and it was poignant. The crowd was silent.
I've never really experienced anything like it on the Hill.
QUEST: The difficulty is how to put in force, effectively, the raft of policies that these companies say are already there, and I do sometimes
wonder, this thing grew much faster than anybody could ever have expected.
Is it possible to put in place satisfactory policies that would make a considerable difference? And if so, what are those policies?
BALKAM: Well, I mean, the first thing is, this is a very serious set of complex problems. And in fact, five different bills were discussed this
morning, all of them trying to tackle slightly different things, and these serious complex issues require serious debate.
Unfortunately, there was a lot of grandstanding, this is an election year, after all, and a lot of finger pointing and even discussion about the
Chinese Communist Party gaining access to data from US citizens, which had absolutely nothing to do with the topic.
So Congress has somewhat itself to blame. I mean, I've been watching this debate for two decades, and they often ask, the CEOs of companies for their
support for their bills, but quite frankly, they don't need their support or permission. They can just go ahead and create bills.
QUEST: Right.
BALKAM: And we have failed. We have failed to create even a federal privacy law upon which safety bills could be built.
QUEST: Now, if we call up the list of CEOs and the various things who was there, the top ones were there. You've got Zuckerberg, you've got Yaccarino
of X; Spiegel from Snap; Citron and Chew -- all Meta, X, Snapchat, Discord, and TikTok, who do you think is the one that is least hitting the target?
BALKAM: Oh, gosh. I mean, I'm sorry to have to say X. I mean, Twitter used to be quite engaged with our organization, and they are no longer and
that is directly related to Musk's takeover, not only the slashing of their trust and safety teams.
I used to sit on the Trust and Safety Advisory Council, that was cut, but also the activities and the behavior of the owner himself, and making
scandalous and outrageous comments that quite frankly, create an atmosphere on the platform, which is anything but trusting and safe.
QUEST: I'm grateful to you, sir. Thank you very much, indeed.
The Fed says it's not yet time to lower rates and held the benchmark steady for the fourth straight month. The Fed Chair Jerome Powell is speaking at
the moment in his press conference, pushing back on market expectations of an earlier rate cut.
The Fed statement said members need more confidence that inflation is moving back to the two percent target. Powell was asked a short time ago,
what would assure them that was happening?
(BEGIN VIDEO CLIP)
JEROME POWELL, US FEDERAL RESERVE CHAIRMAN: Let me say that we have confidence. We are looking for greater confidence that inflation is moving
sustainably under two percent. Implicitly, we do have confidence and it has been increasing, but we want to get greater confidence.
What do we want to see? We want to see more good data. It's not that we're looking for better data. It's that we're looking at a continuation of the
good data that we've been seeing.
(END VIDEO CLIP)
QUEST: Alan Blinder is with me, former Fed Vice Chair. He is now a professor of economics at Princeton. And now Professor, so without dancing
on the -- passing on the head of a pin, this difference between having confidence and greater confidence. We want to see more good data, what's
the sort of thing he's talking about?
ALAN BLINDER, FORMER FEDERAL RESERVE VICE CHAIRMAN: I think what he said there at the end is the answer to your question. A few more months of the
kind of data that we've been getting now.
[15:10:03]
I mean, a lot of people will say you know we've had enough. We've got inflation pretty much down into the twos depending on exactly the
measurement, the period in the index, we're not quite at 2.0, but it is falling. And given that it's falling, assuming that continues, that's the
key point in what Powell is talking about.
Assuming that that continues, it'll be 2.0 before too long and we wouldn't want the Fed up where it is when we hit 2.0 and that's the case for moving
earlier.
QUEST: The other thing, of course, is that they don't want to move -- they don't want to repeat the 1970s and move too early and then finally,
we've only got to come back and have another go at it again. But does that seem likely?
BLINDER: I think it's very unlikely. Well, let me -- I'm going to use your verb "seems unlikely." There can always be surprises. If you look back
at the 70s, that caused that recidivism, if you want to call it that was another energy shock and another food shock, and those would not have been
expected before and they came as a surprise.
Things like that could happen now. It wouldn't be the fault of the Fed, but the Fed would take them into account as bad news on the inflation front.
QUEST: Alan, I spend a lot of time on this program trying to get to the bottom of very fast interest rate increases. Unemployment has remained
muted and the number of jobs created has been strong. Inflation is coming down admirably.
With this, why have we not seen a stronger economic reaction to such a sharp rise in interest rates?
BLINDER: It's a darn good question. I can answer only a piece of it. Because we are admitting that some of the rest is a mystery.
One piece of it is that the traditional ways in which higher interest rates slow an economy through housing and automobiles. Those are the two big
interest sensitive components. Automobiles went through a very strange cycle because of the pandemic and the recovery from it. You'll remember
when because of chips and shipping and other thing --
QUEST: Right, of course.
BLINDER: Especially chips, ours were hard to get, and then finally that got lifted and the pent up demand for automobiles prevented what would
normally have been expected to be a collapse in auto sales.
QUEST: Right.
BLINDER: With 500 points on interest rates, that didn't happen. Housing had a similar, not quite as dramatic cycle because the pandemic increased
the demand for space, for moving to the suburbs, for getting more outside space and more inside space, because people were working at home.
QUEST: Can I just -- earlier this week, I was in Frankfurt with Christine Lagarde, president of the ECB. The message from the ECB is very similar to
what we've just heard today. Yes, things are okay are and moving in the right direction, but we need to see more.
Listen to what President Lagarde told me.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: We are not there yet, and we need more data, more intelligence, more certainty that we are
going to hit that medium term target.
Next move, meaning if we don't hold, okay, if we have the option of either cutting or hiking will be a cut. I'm not suggesting that this is the next
move, there might be a hold and hold and hold on hold. But the next move will be downward.
(END VIDEO CLIP)
QUEST: And this is also similar to what we've seen today in the Fed. The Fed took out from its statement this line about firming on the base of
data.
So now, we have on both sides of the Atlantic, both Central Banks, the two majors in the world pretty much saying the same thing.
BLINDER: That's right. During this cycle, the ECB has been running behind the Fed and I would expect that to continue, although Powell just gave
notice, so the FOMC just gave notice. Don't think we're doing this in March. He didn't quite say that. But it was a clear message that March is
unlikely, not impossible, I wouldn't say, but unlikely.
QUEST: Grateful to have you with us, sir. Thank you very much indeed.
A judge has determined that Elon Musk is getting paid too much for his work at Tesla. His multibillion dollar pay package is now voided and Musk is
airing his grievances on X. Where else?
(COMMERCIAL BREAK)
[15:17:21]
(BEGIN VIDEO CLIP)
ALEXANDER STUBB, FORMER FINNISH PRIME MINISTER: Hi, I'm Alexander Stubb and I mean business.
Today, we'll be looking at QUEST MEANS BUSINESS in the past 15 years. What a phenomenal program. It's been part of the DNA of CNN's fantastic family
of international programs.
You can see QUEST MEANS BUSINESS on all continents. QUEST MEANS BUSINESS in Davos. Quest has even meant business here in the snowstorms of Finland.
Happy birthday. I think you guys do a great show all around. Keep at it. And perhaps one day, I might get invited back. Take care.
(END VIDEO CLIP)
QUEST: I guess that depends on what happens in the elections in Finland where of course the former prime minister is now in a head-to-head contest
for the presidency. But thank you, Alex, for that message.
The markets fell into the red after the Fed indicated it is not ready to consider cutting rates. The Dow and the S&P are both lower. Tech stocks are
taking the worst after disappointing earnings from a few big names.
Google is down sharply on weekly ad revenue -- weak ad revenue. AMD's guidance wasn't as strong as some hoped. Microsoft is low despite good
results from its cloud and AI businesses.
Shares in Tesla are also down. You see on the market. A Delaware judge blocked Elon Musk's multibillion dollar pay package. It was a deal in 2018
that offered Musk a series of stock options based on Tesla's performance. It helped him make him the world's richest man. Some shareholders thought
it was excessive, unreasonable, and the judge now has agreed.
Musk was not happy with the ruling. He wrote on X: "Whether Tesla should incorporate in Texas instead."
Matt Egan is with me. This case was interesting because, you know, this is all about what -- it is not so much about him asking for it really. It's
about the board granting it, isn't it? I mean, you can ask for what you like, but the judge besides describing it as unfathomable said there didn't
seem to be any realistic rhyme or reason to it.
MATT EGAN, CNN REPORTER: That's right, Richard.
Shareholders basically said that this pay package was absurd and the judge is essentially agreeing saying that, that the onus really was on Tesla, and
on Musk to prove that it was fair and saying that they failed to do so and the judge notably described the process as "deeply flawed" in part because
Musk is very close to some of the very same people that he was in negotiating this pay package with.
[15:20:09]
And no doubt, this was a monster pay package. We're talking about valued at over $50 billion, right, more than 300 million stock options and it did
help make Elon Musk one of the richest people on the planet. Although it is worth noting that Tesla shareholders, they have been rewarded pretty
handsomely, right?
QUEST: Right.
EGAN: I mean, in 2018, when this pay package was approved, Tesla was worth about $54 billion. Today, despite the stock drop right now, it's
still worth $600 billion. You're talking about a return of over 1,000 percent, Richard, that is not something you see every day.
QUEST: And Tesla, I mean, Elon Musk has also been saber rattling on this idea of grant me more. I'd like to have more ownership say in Tesla. That
seems highly unlikely, bearing in mind what this is all about?
EGAN: Well, it has been interesting to hear Elon Musk in the last few weeks before this ruling came out talk about his pay structure and
suggesting that some of the AI components of Tesla need to be incorporated and that perhaps he needs a bigger stake in the company.
And so after this ruling, the ball really is in Tesla's court right now. What does the board do? Because they could decide to appeal this ruling or
they could decide to use this as an opportunity to try to lock up Elon Musk into a new compensation package, one that might incorporate some of his
concerns around AI because you know, at the end of the day as one analyst put it, Richard, Elon Musk is Tesla and Tesla is Elon Musk and this company
cannot afford any sort of uncertainty over where Elon Musk is going to be working in the coming years. He just matters way too much to the company.
QUEST: Matt Egan, I'm grateful to you. Thank you.
Boeing's chief executive says now is not the time to offer forward financial guidance. Boeing shares are higher on a better than expected
quarter. However, the CEO, Dave Calhoun told investors the company is to blame for problems with 737 Max 9. You remember the door blew out or the
plug door blew out earlier this month and Calhoun told CNBC the company will learn from it.
(BEGIN VIDEO CLIP)
DAVE CALHOUN, CEO, BOEING: Our full attention, our full focus as a company is to make certain we never have a safety escape again, learn
everything we can from the accident, learn everything we can from the FAA's audit.
To learn everything we can from the stand down that we had, and all the ideas that were given to us by our own people.
(END VIDEO CLIP)
QUEST: And this phrase, "we have a lot to prove." Pete Muntean is with me.
The report, we don't know what it's going to say, but the rumor scuttle buttin' speculation is that Boeing took the plug door off and didn't put
the bolts back on again when they replaced it. That's what the various aviation sites are saying.
If that's -- if there is even a part truth in that, he is right, we have a lot to prove when they start doing that.
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Well, there's a big question here about whether or not that's actually the case and Calhoun was asked
about that on CNBC earlier today saying he won't get ahead of the NTSB, Richard.
But right now, the head of the NTSB just told me today that they are preparing the preliminary report and there could be some interesting
findings in there. We will see. It could be only days until the NTSB releases the preliminary report.
This investigation going on in tandem with that FAA audit of Boeing's quality control. So we will see whether or not the NTSB says the bolts that
hold the plug door into the 737 Max 9 on Alaska 1282 back on January 5th were actually in there.
I want you to listen now to this soundbite from NTSB chair, Jennifer Homendy, she says it is really critical to wait until that report comes
out. But it's a very complex thing that they have to do.
(BEGIN VIDEO CLIP)
JENNIFER HOMENDY, NATIONAL TRANSPORTATION SAFETY BOARD CHAIR: We are doing that work to develop the preliminary report right now. We are in the
final stages of putting that together, but we want to make sure it's right, and that it is clear. This is a somewhat complex issue with a lot of parts.
(END VIDEO CLIP)
MUNTEAN: Here is the quote from Boeing CEO, Dave Calhoun, he calls it "a safety escape," which is some corporate lingo here for the fact that the
bolts were or were not there. So, you know, it's a really interesting way of phrasing it -- Richard.
QUEST: Pete, that phrase --
MUNTEAN: Yes.
QUEST: Quality escape, safety escape, even allowing for wanting to be technically accurate. It's a bit like when, you know, engine fans come off,
they talk about it being liberated from the engine, but it's not in the language that people use on the Clapham omnibus as they say.
MUNTEAN: No.
QUEST: And I think that today for the first time arguably, less of this - - we're not going to let a plane fly if it's not safe, which has clearly and blatantly not happened.
MUNTEAN: Right.
QUEST: And more of this, well we have to prove that we can do it.
[15:25:09]
MUNTEAN: Well, and there's some really interesting language that's being used by Boeing calling it this safety escape. I mean, it really sort of
gets at whether or not the company fully understands the totality of the issue here.
One thing Calhoun did say is that we really own this, but they're not really updating their projections on airplanes being sold right now because
there's really problem after problem with the Max line, the Max 7 right now, Boeing withdrawing a request from the Federal Aviation Administration
-- to the Federal Aviation Administration to make it so that it can fly that airplane more easily and sooner.
The Max 10, United CEO, Scott Kirby saying that they may not be interested in that plane going forward. The issues with the Max 8, of course, we all
know about that. And then now the issues with Max 9.
And so we'll see going forward whether or not they have dealt with this safety or quality escape, or whatever you want to call it. It's the big
million dollar question now. And of course, a lot of passengers want to know that, too.
QUEST: You know, what I find also interesting, you've got Scott Kirby, who is sort of saying, I'm not sure we want them. But you've also got
Michael O'Leary from Ryanair, having sort of said, well, it's all a big mess, and it's horrible and it is their fault. But if there are some extra
planes going, we might be interested. In other words, he's spotting the potential for planes on the cheap.
MUNTEAN: Well, yes, and it's a really dynamic field right now. Of course, there's going to be somebody swooping in, maybe sniffing around for Max
10s. If that is the case, it's really the big question now is whether or not Boeing can fully save face here, as it's being investigated not only by
the NTSB, but also by the FAA and whether or not it brings things more in house.
The big question now is whether or not this was a Boeing issue or a Spirit AeroSystems issue, and that's the subcontractor that builds the Max 9
fuselage and then puts it on a train to Washington, in Renton where the final assembly is done.
So there was some conjecture today by Calhoun saying we may have let vertical integration just get a little too out ahead of us. And so that is
something that of course, the FAA will want to look at in its quality control investigation here.
And there were some opportunity, as you mentioned, in the commercial space for some airlines to swoop in and try and pick up an airplane at a
screaming deal. That's what they all want, right?
QUEST: Excellent. Good to talk to you, sir, grateful for your time. Thank you.
MUNTEAN: Anytime.
QUEST: Thank you.
Now, the European Union wants to pump up the jam as the 1980's song go, quite literally in fact. So you take your jam and you work out how much
fruit is actually in it. Well the EU says changing the rules to make the jam what it says it is -- jam.
(COMMERCIAL BREAK)
[15:31:13]
(BEGIN VIDEO CLIP)
ISA SOARES, CNN ANCHOR: Oh, QUEST MEANS BUSINESS, 15 years already, can you believe it?
CLARE SEBASTIAN, CNN CORRESPONDENT: 15 years, we were very young at CNN.
SOARES: Right. What do you remember from it?
SEBASTIAN: Usually it's wrong to start a sentence with the word but.
SOARES: Yes, no wondering but. Richard does not like them. Any kind of generic wallpaper also out of picture.
SEBASTIAN: Wall paper.
SOARES: And lots of props.
SEBASTIAN: Lots of props.
SOARES: Lots of props, anything, food baskets, don't like inflation, red or yellow.
SEBASTIAN: Traffic lights.
SOARES: Traffic lights. Apples to talk about results.
SEBASTIAN: Results. The dot-plot.
SOARES: Oh. Love the dot-plot. You need to feel your writing. Fill the scripts. We've had a blast.
SEBASTIAN: We have. The school of Quest.
SOARES: Yes, renowned school of Quest. We are grateful to QUEST MEANS BUSINESS and to Richard Quest. That's where we started with the show.
SEBASTIAN: Yes.
SOARES: And we wanted to wish Richard and the entire team a happy birthday. Happy 15th. Here we go. I know you went like this, Richard.
SEBASTIAN: But whatever you're up to, Richard, in the next 15 years --
SOARES: We hope it's profitable.
(END VIDEO CLIP)
QUEST: You're right now wondering buts. The but is the most overused word in a script, but how wonderful to see Isa and Clare.
Now the FBI director is warning Congress that Chinese hackers are preparing to wreak havoc on U.S. infrastructure.
(BEGIN VIDEO CLIP)
CHRISTOPHER WRAY, FBI DIRECTOR: PRC hackers are targeting our critical infrastructure, our water treatment plants, our electrical grid, our oil
and natural gas pipelines, our transportation systems, and the risk that poses to every American requires our attention now.
China's hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and
communities.
(END VIDEO CLIP)
QUEST: Now Wray says the FBI has identified hundreds of U.S. devices that have been hacked by Chinese group. After Beijing's promise not to meddle in
this year's election, he says he'll believe it when he sees it.
Evan Perez is in Washington.
You know, this is one of these things where they all -- they say they know this is about to happen. It's going to happen. But I wonder how powerless
they are to prevent it.
EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, Richard, this is an extraordinary move that the FBI in the last -- just in the last 24 hours
has told us about. Now you saw that very stark warning from the FBI I director. It's something that he's been talking about for a number of
years. But what they did in the last -- certainly in the last couple of months is what -- and we only learned about it in the last 24 hours is that
they went to a court in Texas and they got an order from a judge that allowed the FBI to push through a patch to devices, to internet routers
that are owned privately.
These are office and home office type internet routers that, according to the FBI, had been infiltrated by Chinese hackers. And the purpose of this
was to disrupt the ability of Chinese hackers to be able to use these devices. Now, obviously, its extraordinary thing for the FBI to do to
essentially intrude on personal devices, U.S. devices, in inside this country but that's the level of concern that the FBI says is merited here
because of that warning you just heard from the FBI director, which was that they believe that the Chinese have essentially burrowed themselves
into devices around the country, and that if there was some kind of conflict, for instance, if there was a war over Taiwan, that they could
activate that and do real damage to U.S. critical infrastructure. It's warning that obviously is very difficult for us to really ascertain from
where we sit.
[15:35:10]
QUEST: So is anyone listening? Is anyone listening and actually doing anything as a result or is this a case of -- and I don't mean the director
here, but the politicians on the other side.
PEREZ: Right.
QUEST: Just listening to him, but not actually doing anything.
PEREZ: Well, yes. And not only the politicians, but also like for you and me and all the other, anyone else who's on the internet, you know, it does
behoove us to buy devices that are protected, to protect ourselves because that's the only way you can try to fend off something like this from
happening, from being used by hackers from anywhere. You know, some of them could be criminals, not just obviously, Chinese hackers is a huge problem,
Richard, and it's a problem that I think the FBI and others are trying to warn people about, but it's very difficult to try to make people make these
fixes.
QUEST: Evan, I'm grateful. Thank you.
The president of the ECB, Christine Lagarde, has made a name for herself as a disruptor in the field. And she says for central banking to be more
effective, economists need to stop being so insular.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: many economist are actually a tribal click. What I think we should move towards and not trying
to, I'm trying to convince my colleagues that we have to, is bring in people that are not members of the tribe.
(END VIDEO CLIP)
QUEST: Now, as a result of those comments, of course, a lot of focus on it and the latest survey from ECB's employee union shows such comments perhaps
not helped her popularity. Many employees think Christine Lagarde has become too political, imported politics when it should be more economics. I
asked her about it.
(BEGIN VIDEO CLIP)
LAGARDE: I had the same issue at the IMF, that I have at the ECB, which is to say that no matter how restricted the mandate, and it is more restricted
at the ECB, its price stability, we cannot, and actually we are not anymore relying exclusively on models. We need to go beyond that. We need to
challenge our traditional models. We need to add more dimensions to the challenges that we face. We need to bring in different sciences to the
equation.
As I said, you know, how do we involve epidemiologists? Would we have climate change experts? Would we be more attuned to the geological wealth
that there is here and there when it comes to lithium or cobalt, or other things that are so badly needed to construct vehicles? We would have better
informed decision. And that is exactly what we are not doing in the ECB. We are --
QUEST: But is the equivalent of saying the world is flat to some of these people?
LAGARDE: I think it's changing. I think it is really changing of the ECB. To give you an example, we have hired a scientist, a climate change expert,
who has nothing to do with economist by background but who is really bringing his knowledge, his expertise to the threat that climate change can
constitute for the economy. And that is inserted in models. To give you an example, we are modelling the impact of El Nino. You know El Nino.
QUEST: Yes.
LAGARDE: On the price of food. That matters for inflation. So what I'm trying to say, and I know sometimes it sounds heresy to some, is that we
cannot look at the world and look at the economy with a very sort of narrow-minded approach. And with group think. We have to just challenge
just as you shock a model, you have to also challenge your own certainty and ask yourself, OK, what if and what about demographics? What about
sciences? What about epidemiology, and so on and so forth?
QUEST: Something tells me, not so much of these, like generally with economics, IMF economics. Something tells me you will rather secretly
enjoying shaking everything up on that front.
LAGARDE: I think we get better. I think we really get better. You know, the world is not routine. The world is not constantly the same. So we have to
constantly rethink how we see it, and what tools we use to read it and to understand it.
(END VIDEO CLIP)
QUEST: Christina Lagarde.
The E.U. is singing a new tune when it comes to breakfast.
(MUSIC)
QUEST: I never thought we'd have that. "Pump Up the Jam." Belgium now holds their council president to use that song to announce an agreement. It
requires jam manufacturers or jellies to pump up the amount of fruit in their products.
[15:40:02]
A hundred mole grams per kilogram for regular jams and 50 more for fruit heavy jams. The goal here is to reduce jam sugar content and make jam
healthier. We have two here. We have the (INAUDIBLE) grape, the grapefruit spread. One is made from all fruit products, five grams of added sugars,
and then you have to Smucker's, nine grams of added sugars and a whole lot of corn syrup. High fructose corn syrup. Corn syrup, fruit pectin, citric
acid. A lot of that as well.
I would taste them. Maybe I should just have a quick little taste. That's OK. This is the full fruit. You can see the fruit in this. You can taste it
as well. Discretion is the better part of valor.
That's QUEST MEANS BUSINESS. I'll have dash to the closing bell at the top of the hour.
"World of Wonder" next. Allow me to take you to Zanzibar. That's very good.
(COMMERCIAL BREAK)
QUEST: I'm Richard Quest. I love traveling the world. Broaden the mind. Open the heart.
It really is quite something to see all this.
And I'm not done yet. It's time to embrace new adventures. Find the fun. Seize the moments.
Spectacular.
In this "World of Wonder."
There's a phrase in Zanzibar that sums up island life. Hakuna Matata, they say. No worries. Life is good. I feel it as soon as arrive. Even watching
locals risk life and limb.
[15:45:01]
OK. Here comes, he goes, and -- how often do you do this?
UNIDENTIFIED MALE: Every day.
QUEST: Every day?
UNIDENTIFIED MALE: Yes.
QUEST: Why?
UNIDENTIFIED MALE: Since we're young, we do these things. We just like this. In the afternoon I'll be here. I feel like I'm free.
QUEST: No, I'm not going to have a go.
UNIDENTIFIED MALE: Go on, go on.
QUEST: No, no. No, no. I know my limits. I know my limits.
UNIDENTIFIED MALE: Let's go. Let's go.
QUEST: More Somalis with me and of course couldn't help joining in the calls.
Oh, yes, this is Stone Town. It's where most visits start. The heart of the capital on this extraordinary island. Out of Tanzania with its very own
Zanzibari way of life. I'm getting lost in its labyrinth, the valleys. I'm trying to find my way to the center and Jaw's Corner.
Do you know why it was called Jaw's Corner.?
UNIDENTIFIED MALE: I have no idea.
QUEST: Have you got it yet?
UNIDENTIFIED MALE: No. Jaws.
QUEST: Yes. Yes. But what was the movie?
UNIDENTIFIED MALE: "Jaws."
QUEST: That's why it's called Jaw's Corner. After the movie "Jaws."
UNIDENTIFIED MALE: But how does the movie relate to this place?
QUEST: That --
UNIDENTIFIED MALE: That doesn't matter.
QUEST: Details. Detail is awesome. Detail.
Jaw's Corner is where the melting pot of cultures come together, but if you sit at these tables you'd better be ready to play tough. Take no prisoners.
Win or else.
Did I mention?
Who goes first? Who goes first?
I don't play dominoes. They are trying to intimidate me. It's working. Now I understand Jaw's Corner. These are the sharks. I'm the bait.
I'm going home. Thank you.
Game over. These sharks suddenly become friendly fish. I escaped intact. I've actually come to Jaw's Corner to rendezvous with Farouque Abdela.
God, we're of an age.
Farouque is a legend. Everyone knows him. Born here, he left for London aged 14. He returned a famous fashion designer whose work attracted the
best, including the late Diana Princess of Wales.
You're very famous.
FAROUQUE ABDELA, FASHION DESIGNER: Am I?
QUEST: Farouque is showing me his Stone Town, and that means an introduction of sorts to another Farouque, more famous arguably.
ABDELA: That's Freddie.
QUEST: I'm not going to be a star. I'm going to be a legend.
ABDELA: A legend.
QUEST: Freddie Mercury whose real name was Farrokh Bulsara. The rock legend with Queen born here in Stone Town and remembered in this museum.
Hello.
UNIDENTIFIED FEMALE: How are you?
QUEST: I'm very well. Thank you. How are you? I mean, spot Freddie. Yes. The teeth.
The museum is good as far as it goes.
These are what? These are handwritten --
ABDELA: They are handwritten notes.
QUEST: Lyrics.
ABDELA: Put out the fire.
QUEST: Regretfully, it doesn't tell the whole story of Freddie Mercury. Glossing over important part of his life such as how he died of AIDS
related complications.
Zanzibar's colorful history is on display.
Oh, look at that.
You can see it in these ornate, carved wooden doors, a traditional sign of wealth. Today there are still craftsman who can do this quality of work
like Mr. Tajir.
MR. TAJIR, CRAFTSMAN: Hello.
QUEST: Hello.
I wanted him to let me carve.
I don't get to carve. I just get to sandpaper.
TAJIR: So you take your sandpaper here.
QUEST: Yes.
[15:50:03]
TAJIR: Just to-and-fro.
QUEST: I'll take the sandpaper.
ABDELA: I think you might be able to manage that one, Richard. I think.
QUEST: To-and-fro, to-and-fro.
ABDELA: Both sides.
QUEST: Don't you stop? One at a time, please.
ABDELA: One at a time.
QUEST: As the critics continue to hurl their insults, I've noticed I've been set up. I'm not working on a door or a chest. It's another game.
What's it called?
ABDELA: Bao.
QUEST: Bao.
ABDELA: You can try it with Gabby. Do you know how play?
QUEST: Bao is complicated. It requires arithmetic skills.
TAJIR: One, two, so here's empty. So now it's your turn.
ABDELA: That's clever, Richard.
QUEST: I'm fodder. This isn't Jaw's Corner but I'm fodder nonetheless.
Just watch. There we go. Yes. Here we go.
I realized quickly in Bao the trick is counter ahead.
You want to get those, aren't you? It's just mathematics.
The tide had turned in my favor. And Mr. Tajir knew it.
TAJIR: Wait for your turn.
QUEST: He's getting antsy now.
Four, five, six.
TAJIR: You seem to be the winner.
QUEST: I have no idea how. Thank you.
Mr. Tajir had the last laugh, of course.
Tea break is over.
UNIDENTIFIED MALE: Back to the sanding.
QUEST: Back to the sanding. To-and-fro, to-and-fro, to-and-fro.
(COMMERCIAL BREAK)
QUEST: Zanzibar's beaches are picture perfect. And on this island, I'm never very far from being able to enjoy them. Michamvi, for instance, is
only an hour and a half drive from Stone Town.
Fishing is vital to this island's life. The traditional boat is carved from a mango tree and it is my vessel for the day.
UNIDENTIFIED MALE: How's your sailing skills?
QUEST: How are yours?
UNIDENTIFIED MALE: Not good.
QUEST: Yes, me neither.
I shall do what all amateurs do. Covered up my ignorance with muster and bravado.
Hi, Captain. Good to see you, my friend.
CAPTAIN ALI: Hi. Nice to meet you.
QUEST: Hali is a seasoned captain. He drew the short's draw and has agreed to show me the ropes.
Will you stand by for that?
ALI: Yes. Perfect.
QUEST: OK. But the observer will have noticed one really important point. I've got a foot out the boat.
ALI: Now take it for inside.
QUEST: OK. One more time, Captain.
Now raise the mast. How difficult can that be?
I've got it. Be careful. Be careful.
UNIDENTIFIED MALE: I feel like that's going to come down on me.
QUEST: Well, it will divide, I'm pulling but it's --
UNIDENTIFIED MALE: This is how it all goes wrong.
QUEST: This is heavy.
UNIDENTIFIED MALE: Just hold on to it.
QUEST: I am. He didn't quite warn me how heavy that was going to be. My god.
[15:55:06]
We are ready to sail. If we only have some wind.
UNIDENTIFIED MALE: Got it?
QUEST: Yes. We're sailing. This is so cool. Captain.
ALI: Yes?
QUEST: We're sailing.
UNIDENTIFIED MALE: Yes, good day.
QUEST: Captain Ali tells me these (INAUDIBLE) originated here in Zanzibar. They are not just for tourists and land lovers like me, they serve a very
real purpose.
ALI: Many people are that were using for fishing.
QUEST: Do you fish?
ALI: I fish. Someday I go to fishing tuna or barracuda, king fish, calamari. You know calamari?
QUEST: Yes. I love calamari. Where is it?
Everything is going well. What could possibly go wrong?
ALI: OK. Close.
QUEST: I don't know how to close.
ALI: Release the role.
QUEST: It won't release.
Oh, the indignity as we are towed back to shore.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. Together were going to have a dash for the closing bell 90 seconds away from the end of trading. The Fed held rates
steady, and the chair Jerome Powell says a rate cut is unlikely in March.
And now you look at the way the Dow slightly after the press conference, but you can see the Dow is down deeply unhappy. They didn't get what they
want. The triple stack also sharply down. You can see particularly the Nasdaq is bearing the brunt of the losses today as tech shares are on the
slide. Look at the Dow components. One of the reason for the Dow's initial good strong gains, which of course is now offset by tech, is that Boeing is
up nearly 5 percent of the better-than-expected Q4.
But Boeing's robust performance and healthy share price gain is offset by Cisco, Microsoft, IBM, Apple, all the tech is at its near bottom of the
market. So that's what the sort of the push and pull if you will on the course of the day.
It's the way in which the markets are moving on the day when we clearly now know that there's going to be no interest rate cut. Not this month or next
month, and probably, and arguably not for a few moments to come.
And that's the dash to the closing bell. I'm Richard Quest in New York. As always, whatever you're up to in the hours ahead, I hope its profitable.
The closing bell on Wall Street is ringing and "THE LEAD WITH JAKE TAPPER" starts now.
END
