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Quest Means Business

NASA Drops Plans to Host Climate Reports on Its Web Site; Meta and Amazon to Offer Tech Services to 30 A.I. Startups; CEO of World's Biggest Spirits Maker Diageo Steps Down. Trump Addresses Reports He Plans to Fire Fed Chair; Syria Condemns Israeli Strikes on Damascus; Ukraine: Russia Launched 400 Drones and a Missile Overnight Aired 4-5p ET

Aired July 16, 2025 - 16:00   ET

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

[16:00:07]

ERICA HILL, CNN HOST: And there you have it, the closing bell. The Dow Industrials as you see there, ending the day in the green, just up about a

half a percentage point. Always nice to end in positive territory though, of course. Those are the markets, these are the main events.

President Trump says it is highly unlikely he will fire the Fed Chair after telling lawmakers otherwise.

Israel carrying out a series of powerful strikes in the Syrian capital of Damascus.

And the CEO of Diageo is out after two difficult years.

Live from New York, it is Wednesday, July 16th. I am Erica Hill, in for Richard Quest. This is QUEST MEANS BUSINESS.

Good to have you with us this evening. Tonight, U.S. President Trump is sending mixed messages about Jerome Powell's future as Fed Chair and the

markets are taking note. The Dow actually plunged on reports that Trump had planned to fire Powell in the very near future, but then recovered when

Trump took questions during a meeting with Bahrain's Crown Prince, where he appeared to deny any plan to fire Powell.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: He is doing a lousy job. But no, I am not talking about that. We get -- fortunately, we

get to make a change in the next what? Eight months or so, and we will pick somebody that's good and we will pick somebody. I just want a fair job.

We want to see lower interest rates. Our country deserves it. We're making a lot of money. We are doing great.

(END VIDEO CLIP)

HILL: Trump then went on to accuse Powell of mismanaging renovations at the Federal Reserve headquarters. It is an increasingly common focus for the

President.

(BEGIN VIDEO CLIP)

TRUMP: I don't rule out anything, but I think it is highly unlikely unless he has to leave for fraud. I mean, it is possible there is fraud involved

with the $2.5 billion to $2.7 billion renovation. This is a renovation. How do you spend $2.7 billion?

And he didn't have proper clearance et cetera, et cetera.

So, you know, that's going on. So, you know, there could be something to that.

(END VIDEO CLIP)

HILL: Phil Mattingly is in Washington for us tonight. Vanessa Yurkevich joining us from New York.

So, Phil, let's start with you. What is interesting is the pushback that we heard there from the President saying, oh, you know, I am not really

looking into this. We've also had some pretty public comments today from lawmakers, Senators Tillis, Kennedy as well, warning of that in fact,

firing Jerome Powell could tank the markets.

How much is the public pressure mounting on perhaps private pressure as well for the President?

PHIL MATTINGLY, CNN CHIEF U.S. DOMESTIC CORRESPONDENT: Erica, I think, look at the -- the best part about the chart of the day and the markets that you

just put up is that like red divot for about 38 minutes. That I think is the best explanation as to where the President ended up today compared to

where he was last night privately with Republican lawmakers, where his advisers are publicly saying they are in an escalatory manner over the

course of the last couple of days, as they try and put pressure on the Federal Reserve Chairman, but don't really want to cross that threshold of

what it would mean if they actually try and pursue removing him.

Now, it is not a secret, nor is it subtle, the President's view on Jay Powell, who he appointed back in 2018, nor his view on where interest rates

should be in his mind, significantly lower than they are right now. The real issue that the President has and why he hasn't taken the step of

actually trying to remove him, trying to fire him, or gone down that pathway, despite what he seemed to imply to lawmakers last night, Erica,

there are two points to this.

One is statutory. They don't believe that they actually have the legal authority to do so without cause. You mentioned that renovation project. It

is probably tenuous at best that that could be justified as cause. But pursuing that would also be a pretty gray area on the legal side of things,

and that dovetails straight into the second point, which is the market reaction.

Again, that divot that we saw just for that brief 30-minute period today, you saw long term bond yields spike upwards, put that long term, that is

the worst case scenario over time. And for a President who wants interest rates to come down, the best way not to have that happen is to throw the

markets into absolute turmoil, almost certainly mean the other members of the FOMC, outside of Powell, aren't going to vote to cut rates, not just in

July, not just in September, but perhaps further on and will really do the exact opposite from a long term rate perspective over the course of the

months ahead.

HILL: And as we are looking at all of that, we do also have some reaction from Wall Street. So Vanessa Yurkevich is with us as well.

Vanessa, you know, Jamie Dimon, the fact that Jamie Dimon was noting after or I guess on the earnings call after the earnings were released, talking

about the independence of the Fed, saying that it is critical here, making those comments publicly is also important in terms of the message that it

is sending very clearly to the President.

[16:05:06]

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, certainly the more people, the more prominent people that you have talking about how

critical it is for the Federal Reserve to act independently from the federal government, independent from the direction or the wants and desires

of the President of the United States, is really important. And, of course, Jamie Dimon heading up JPMorgan hearing from him on this in his earnings

call yesterday, was really important.

Here is what he said. He said: "I think the independence of the Fed is absolutely critical. Playing around with the Fed can have adverse

consequences, the absolute opposite of what you might be hoping for."

Also spoke to Sam Stovall, the chief investment strategist at CFRA, and he said that this would be bad. This would be bad for Wall Street. And

ultimately, as Phil laid out there, if you look at that 30 or so minute period, you saw markets fall, you saw yields increase and you saw the

dollar weaken, and that was just a snapshot of what could happen if ultimately, President Trump went ahead and decided to fire the head of the

Federal Reserve, Jay Powell, which very, very unprecedented and likely cannot be done. But just the talk about that or the rumor about that is

very, very nerve wracking for Wall Street.

Now, the Federal Reserve actually is going to be meeting in two weeks to make their next decision about whether or not to cut rates or hold rates

steady and when I say "they," it is because there is a Board that there is multiple members of this Board that are voting on whether or not to adjust

rates in any way.

Of course, Jerome Powell is the face of the Federal Reserve, so he takes all the heat. But investors on Wall Street, according to the CME Fed watch

tool that we track, 97 percent of investors believe that the Federal Reserve will hold rates steady in the next few weeks when they have that

Fed meeting. They believe that as much heat and pressure is mounting on Jerome Powell, that the federal reserve will still hold rates steady as

there is just so much uncertainty, really over tariffs. That's really what this is about for the Federal Reserve.

They are not listening, Jerome Powell said he is not listening to the political pressure, that he is really trying to do what's best for the

economy and for the American people. That is, of course, in contrast with what President Trump wants, which is to lower interest rates because he

believes that inflation is moving in the right direction, that its being tamed. But in fact, we just saw in yesterday's Consumer Price Index Report

that inflation is heating up a little bit.

So it is going to be a very, very, very interesting meeting in the next couple of weeks. A lot of eyeballs on the Federal Reserve's decision and

also just a lot of eyeballs on how much pressure the President decides to put on Jerome Powell in the next few weeks.

The decision obviously has consequences, Erica, for everyday Americans. Interest rates that the Federal Reserve is working with or deciding to cut

or not affects mortgage rates, credit card rates, car loans, student loans. So for the American people, it is something to watch very closely. Not just

all of this political jib-jab that's going on right now, but wondering what the Federal Reserve decides to do that would impact Americans' everyday

lives.

HILL: There's important question about independence, that's the word that keeps coming up, right, when we talk about this and the reality is that in

a number of months, Jerome Powell's term will be over. The President will have the opportunity, Phil, to appoint someone new to that role. Scott

Bessent said, as recently as yesterday, I believe that, you know, it is important, very important that there be an independent Central Bank.

Is there a sense in Washington that independence is actually important to the President.

MATTINGLY: To the President? I think it is pretty clear, no on some level. I am short-handing a little bit here based on public commentary, and

obviously, what he said behind-the-scenes. I think you hit on a key point, though, the President's economic advisers are keenly aware of that reality.

In fact, Kevin Hassett, the NEC Director, who is actually one of the finalists, kind of depending on the day, may actually be the leading

contender right now to be the President's pick to be the next Fed Chair. In the first term, he actually worked behind-the-scenes to put a stop to the

President's efforts, talking about firing Jay Powell the first time around. Yes, this actually happened in the first term as well, with the same guy.

They recognized that it has a market impact that is adverse in the near term and also threatens kind of stability over the longer term. There are

reams and reams of economic data and research about what happens when the market perceives a Central Bank not to be independent.

The President's economic team understands that, the President obviously has a very specific view on where rates should be, and I think that clearly

takes priority in his mind over the value inherent in the independence of the Central Bank.

HILL: Absolutely, Phil, Vanessa, appreciate it. Thank you both.

Also joining us this hour, Jared Bernstein, of course, former chair of the White House Council of Economic Advisers for President Biden.

It is good to see you this afternoon. I want to pick up really where we left off with Phil there. The importance of the independence here, right,

that the Fed remain independent.

[16:10:10]

And I think when this comes up a lot in conversation, people will automatically, maybe not automatically, but often will point to Turkey and

say, this is a prime example of why it is important that the Fed remain independent. Do you think that's an accurate story line, if you will, to

look at in terms of stressing what it means to have an independent Central Bank here?

JARED BERNSTEIN, FORMER CHAIR OF THE UNITED STATES COUNCIL OF ECONOMIC ADVISERS: I very much do.

I think the Central Bank independence starts with the committee that sets interest rates, and the Chair of that committee, of course, Jerome Powell,

and he has very zealously guarded that independence and that is a tremendous favor for the American economy.

History is absolutely littered with economies that have been brought to their knees when the Central Bank is essentially taken over by the

administrative branch, exactly what President Trump is talking about, and the results tend to be highly inflationary.

We already have the tip of the spear of that problem with tariffs boosting inflation rates, which, by the way, is exactly what Powell and the Fed are

concerned about and our Consumer Price Index yesterday, we saw some early evidence of that and my expectation is that that is going to continue to be

a problem.

HILL: To that point, you sort of answered this question, but I think it is important to address it head on. The President has said repeatedly he wants

rates to come down. Given what we are seeing in terms of the data, do you see a case for that in this moment?

BERNSTEIN: Well, there are rates coming down and there are rates coming down three percentage points is what he is talking about. I think there is

a credible case for a rate reduction in the next Fed meeting or the one after that, July or September and that would be a quarter point and that is

you know, a different kind of decision than what the President is arguing for.

You know, there is a of rules that Central Bankers follow based on the data that suggests what the Federal Funds Rate should be, and that rule tells

you right now that it should probably be somewhere in the four to five percent range. If you tweak it a little bit, maybe you can get to 3.75,

something like that.

But based on where the interest rate be, given the uncertainty about where inflation is headed, is in that range, in the range that we are currently

in with a cut or two in the next month or two. If you took the rate down to one percent, not only would you be deeply compromising the Fed

independence, but you'd start to be screwing around, you'd start to be really potentially altering the inflation anchor. That is the expectation

that the Fed is taking the inflation problem seriously, and that gives you all kinds of deep problems that last, you know, that last for a long time.

HILL: We heard from Senator Kennedy of Louisiana earlier today telling CNN that the market would crash, in his view, if for some reason the President

were to fire Jerome Powell. A White House official, saying, look, he is just toying with the idea. The President himself saying, oh, it is not

really going to happen.

But do you agree with Senator Kennedy? And frankly, what we've heard from a number of other folks about just how widespread the impact could be, should

Jerome Powell be forced out or fired?

BERNSTEIN: I mean, I think if you look at today, the market actually took a dive when Trump said he would fire Powell and then it recovered very

quickly when he said he wouldn't.

I think what the market does or doesn't do is really hard to know. I mean, there is probably some of this that's already priced into the market. They

know that Trump really wants to put someone who he can influence in the Fed Chair. So whether that happens next May or whether that happens sooner,

that's not immaterial. I don't want to overstate my case, but what the market does is actually secondary to what I was just talking about.

If global markets, if investors in this country and around the world believe that the independence of the Fed is now deeply compromised by the

Trump administration because they want lower interest rates to try to finance this huge deficit that they have just taken on in a climate where

tariffs are putting upward pressure on inflation, that's going to really threaten the idea, we call it Anchored Inflationary Expectations. It is a

very confusing way of saying the idea that the Fed will do what it takes to keep inflation in control. That is a powerful force that by itself in the

market psychology, keeps inflation within a pretty narrowband, usually.

And to undermine that, that's not just a week long problem or a month long problem or a market dips today and goes up tomorrow. That's a year, many

years long problem.

HILL: Yes, Jared Bernstein, great to have you with us. Appreciate your perspective. Thank you.

BERNSTEIN: Thank you.

[16:15:05]

HILL: Still to come here, Israel launching a series of powerful strikes on Syria's capital. More on the Arab Minority Group, which Israel says it is

trying to protect.

(COMMERCIAL BREAK)

HILL: Syria is condemning Israel for striking several government buildings in Damascus on Wednesday, calling the attacks a dangerous escalation.

(SYRIA T.V. VIDEO CLIP PLAYS)

HILL: So that video you see there, this is from a Syrian television channel. It shows the Ministry of Defense being hit live on air if you look

there in the background. Israel says its strikes on Syria are being done to protect the Druze community.

The Arab Minority Group has been involved in deadly clashes with Syrian government loyalists in recent days.

Jeremy Diamond has more now from Jerusalem.

(BEGIN VIDEOTAPE)

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (voice over): Israeli bombs rocked the Syrian capital of Damascus, striking the Defense Ministry in an

area near the Presidential Palace.

At least three people were killed and 34 injured in the strikes, according to the country's Health Ministry. The Defense Headquarters suffering a

serious blow, but the true cost of these strikes may not yet be known, threatening to derail new U.S. brokered security talks between Israel and

Syria.

MARCO RUBIO, U.S. SECRETARY OF STATE: We think that we are on our way towards a real de-escalation and then hopefully get back on track in

helping Syria build a country and arriving at a situation there in the Middle East that is far more stable.

DIAMOND (voice over): The attacks came after days of clashes in Syria's southern city of Suwayda, between Bedouin tribes and the Druze community, a

religious minority whose members also live in Israel and Lebanon.

Dozens of people have been killed in the clashes in recent days. Syrian troops soon entered Suwayda, with the government saying it was looking to

stop the violence. But some Druze leaders saw the approach of government forces as a threat, and so did Israel, which struck approaching Syrian

tanks, rocket launchers and trucks carrying weapons, saying it was acting to prevent a massacre against the Druze.

But Israel isn't just striking to protect the Druze.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): We are committed to keeping Southwestern Syria a demilitarized zone.

DIAMOND (voice over): Israeli troops captured this buffer zone between Syria and the Israeli-occupied Golan Heights after the fall of the Assad

regime last year, but Israel has also demanded Syrian troops remain out of Southern Syria altogether.

In Israeli held Golan Heights, the large Syrian Druze community here is deeply impacted by attacks on the Druze in Suwayda.

FAEZ SHKEIR, ISRAELI DRUZE (through translator): My wife is in Syria. My uncles are from Syria and my family is in Syria in Suwayda. I don't like to

see them being killed. They kicked them out of their homes. They robbed and burned their houses, but I can't do anything. It is very hard on me.

DIAMOND (voice over): That sense of helplessness, driving hundreds of Druze to take matters into their own hands, pouring across an Israeli security

fence and into the Syrian buffer zone on the road to Suwayda.

Jeremy Diamond, CNN, Jerusalem.

(END VIDEOTAPE)

HILL: While President Trump continues to defend his 50-day ultimatum for Russia to make peace, Ukrainians are facing even more sleepless nights.

Ukrainian officials say the Kremlin unleashed some 400 drones overnight, targeting four key regions, including the hometown of President Volodymyr

Zelenskyy, Kryvyi Rih.

The latest assault has left at least three people dead, several more wounded. CNN's Nick Paton Walsh has more.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: Four hundred drones attacked Ukraine last night, said their officials, not a

record by any stretch of the imagination, but four cities hit particularly hard.

The second largest, Kharkiv hit with 16 drones in just 14 minutes. The officials there said two people killed in the regions around it, and

Ukrainian President Volodymyr Zelenskyy's hometown of Kryvyi Rih hit with what officials there said was the largest attack since the start of the

war.

The capital, Kyiv, though Zelenskyy himself remarked, spared a substantial attack in recent days and he indeed suggested possibly joking that it was

the presence of Trump's Ukraine envoy, General Keith Kellogg there that potentially meant this capital had had a few nights off.

He has said to have departed of late, after certainly a different tone in his conversation, since the White House appears to have soured on the

Kremlin.

But Zelenskyy, joking that perhaps they should have kept Kellogg around, given him a Ukrainian passport, suggesting that the lack of Russian attacks

during his stay there shows that the United States is causing Russia to be afraid that they are essentially concerned about hitting senior U.S.

officials, but still overhanging that visit, the speed in which the Trump administration now thinks it can get vital Patriot interceptor missiles to

the Ukrainians.

Trump suggesting potentially that could be a matter of days. They might already be headed to Ukrainian hands. Germany, perhaps a little more

conservative in its estimates, saying that a decision to supply the batteries that fire the interceptors would be days away and it might take

manufacturers potentially months to get them into Ukrainian hands.

But a new urgency there, not quite as heavily reflected in the 50-day deadline for secondary sanctions that Trump proposed, potentially against

China or India, the main purchasers of Russian energy. Will they use that period to pressure Russia into diplomacy? Well, Moscow already brushing off

the mere idea of that.

Sergey Lavrov, their Foreign Minister, saying that they have had a 24-hour deadline, a hundred-day deadline, they're increasingly used to these

deadlines essentially whizzing past them.

And a debate to still now in the public about exactly what kind of weapons the Americans may end up permitting the Europeans to buy off them for

Ukrainian use, reports suggesting that perhaps Trump has discussed longer range missiles potentially being supplied to the Ukrainians, he dismissed

that and even encouraged Ukraine not to hit Moscow.

But certainly a change in his thinking, a change in the tone of the relationship with Kyiv. Zelenskyy commenting how the only way to change

Russia's behavior was strong weapons and strong sanctions. Well, they might get some weapons, but strong sanctions are still 50 days off and 50 days in

which potentially Russia can make significant changes if it launches a full scale offensive along the front lines in these summer months.

(END VIDEOTAPE)

HILL: And our thanks to Nick Paton Walsh for that report.

Well, when it comes to Donald Trump shifting policy on student visas, it is sparking concern and a whole lot of uncertainty among international

students, including those from China.

China is the second largest country of origin for foreign students in the United States, and as Will Ripley reports, a number of them are now

rethinking their plans.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice over): An American Ivy League education, the gold standard for generations, especially for

students from China.

UNIDENTIFIED FEMALE: Oh my God.

RIPLEY (voice over): This viral video, a student getting accepted to Harvard has millions of views on Chinese social media. The book, "Harvard

Girl" is still a bestseller 25 years after publication.

(UNIDENTIFIED MALE speaking in foreign language.)

RIPLEY (voice over): Videos like these teach Chinese students how to prepare for elite American schools.

[16:25:10]

Even Chinese leader, Xi Jinping sent his daughter to Harvard. Xi Mingze studied under an alias shielded by Secret Service style security.

TRUMP: We want to have foreign students, but we want them to be checked.

(PEOPLE protesting)

RIPLEY (voice over): But the twists and turns of President Donald Trump's student visa policy are making even ordinary Chinese applying for visas

feel whiplash.

UNIDENTIFIED MALE: Devastation, you know, like frustration and uncertainty, anxiety.

RIPLEY (voice over): First, Trump wanted to aggressively revoke and scrutinize some student visas. Then, after the latest trade talks, he

posted "Chinese students using our colleges and universities has always been good with me."

RIPLEY (on camera): Is there an impression that the United States is an unfriendly place, an unsafe place?

ERIC ZHANG, CO-FOUNDER, ONE STEP AHEAD EDUCATION: I think so. I think so. Think about the immigration issue, think about the financial crisis, think

about the job market, and so everything looks pretty bad.

RIPLEY (voice over): Eric Zhang says he has helped place more than a thousand Chinese students in U.S. schools. He says these days, many are

walking away.

What are Chinese parents saying to you?

ZHANG: Now, you know, considering a lot of the rhetoric from the current administration and also the worry about the safety, about the uncertainty -

-

(PEOPLE protesting)

RIPLEY (voice over): That uncertainty, he says, the biggest factor in losing about a third of his clients this year.

ZICHEN WANG, PRINCETON GRADUATE AND JOURNALIST: Many of the Chinese students are quite -- are quite fearful at the moment.

RIPLEY (voice over): Recent graduate and former journalist, Zichen Wang says the Trump administration is sending mixed messages to China's rising

middle class.

WANG: Yes, they benefit greatly from the tremendous American education system, especially its top universities, but at the same time, they also

contribute greatly to research.

RIPLEY (voice over): They also contribute financially. Many Chinese parents scrimp and save easily, spending $80,000.00 a year or more.

The roller coaster in Washington, fueling Beijing's ongoing narrative that America is a declining power that grows increasingly paranoid.

WANG: I think the U.S. is very uncomfortable with the rise of China.

(CHEERING AND APPLAUSE)

RIPLEY (voice over): He says a U.S. degree no longer seen by some as a passport to power, prestige and prosperity, chipping away at the value of a

U.S. education and perhaps America's global influence.

RIPLEY (on camera): Until India took the top spot last year, Chinese made up the largest group of international students in the U.S. and experts

agree they contribute a lot, not only by fueling innovation in areas like tech and crucially, A.I. also Medicine, many are also staying. The best

graduates getting job offers and working in the United States, boosting the U.S. economy and helping further innovation in the sectors that are so

ultra-competitive right now between the U.S. and China, particularly technology, particularly science, not to mention the fact that all of those

students are paying full tuition, so that would be billions of dollars lost for U.S. schools and the U.S. economy if this chilling effect continues and

students stop trying to enroll.

Will Ripley, CNN, Taipei.

(END VIDEOTAPE)

HILL: Much of the U.S. has been hit by extreme weather this summer, and we are now learning that NASA says it is no longer going to publish climate

change information and reports on its websites, even though there is a law, so what's going on here and who will have access to that information?

That's next.

(COMMERCIAL BREAK)

[16:31:35]

HILL: Parts of the U.S. East Coast are under a flood watch today, a risk that has become all too common this year. There have now been a record

3,000 flash flood warnings through mid-July, as highlighted, of course, by the deadly storm in Texas. More than 130 deaths attributed to that.

Many scientists are pointing to changing weather patterns as a culprit. Interestingly, though, NASA on Monday said it would no longer host the

National Climate Reports on its Web site. Reports, in fact, were taken down from sites earlier this year.

Gina McCarthy was the White House national climate adviser during the Biden administration and joins me from Boston.

So I was struck by some of this because what we heard actually was that some of this information, which is required by law to be posted, as you

well know, the agency that oversees that and that used to host the reports put out a statement saying, "We've met the legal requirements to present

the data to Congress. NASA has no legal obligation to host the global Change.gov's data," basically saying, we're not going to put it up there

anymore. We told Congress.

Do you agree that this in fact fulfills the administration's legal requirements to make that information available?

GINA MCCARTHY, FORMER WHITE HOUSE NATIONAL CLIMATE ADVISER: Of course not, Erica. I don't agree with it. And frankly, I think it's just ridiculous.

You know, it's very clear that folks in this administration are trying to deny science. They don't want people to understand the challenges of

climate and to work together to try to resolve and -- those issues in a way that will protect people.

You know, and it is very clear to me that if you go around hiding the science, you're going to lose not just for them, but for all of us. You

know, we can see the damage. As you mentioned, Texas, but it's not just there. It's California. It's North Carolina. Right now it's the East Coast

of the United States, New York and New Jersey. These things are going to continue to be challenges, and we need to fight to make sure that our

government is working for ourselves, our people, our community, our businesses, to figure out how we can keep all of us safe. Not to deny the

science.

HILL: So to your point, in terms of the information that we're talking about here, this was information that would allow state and local

governments and even the public to know what to expect, frankly, amid a changing climate with a warming planet, so that they could adapt, so that

they could plan.

Without that information now being hosted in an easily accessible place. What happens to it?

MCCARTHY: Well, frankly, it denies us the ability to have everybody in the United States have access to information that matters to them. But frankly,

it's also just a compelling reason why we should move forward beyond the 2025 report. And that's exactly what's happening with people outside

reputable organizations. Scientists that have worked on this data are now working on their own to compile the 2026 information so that people can

have credible data and access to figure out how they can protect themselves.

You know, it's sort of embarrassing to have the United States hiding in this way. It's very clear to me, since 2007, when the Supreme Court made

the endangerment finding decision to basically say that we actually did have a climate problem, that we had to embrace and fix.

[16:35:08]

And now we have, you know, our own federal government denying science and putting all of our communities. And frankly, our reputation internationally

are at risk. Other countries understand what's going on. Our country understands what's going on and what's -- what we need to do is work

together to actually know what the science tells us, begin to invest in resilience so that we can all make sure our families and communities stay

safe. And what this administration is doing is entirely not that.

HILL: You've talked about scientists going out and trying to do the work on their own, right? We're also seeing, I mean, we're seeing scientists and

researchers be recruited by other countries, right? We talk about the brain gain potentially in Europe and Canada and other areas. Are you also seeing

in your experience and folks that you're speaking with local governments, local officials trying to work with one another if they don't feel they're

getting the information that they need?

MCCARTHY: That's already happening, Erica. And I'm grateful that it is if we cannot rely on the federal government to speak the truth and tell us

what the science is saying, then we have to rely on others.

Look, I work with Bloomberg's America is All In now and it's all about bringing states together. It's all about bringing local communities

together, bringing businesses into the discussion, universities, other institutions, because we all know what's happening, Erica. This is not a

shock anymore. And we all have to work together to actually develop the kind of protections we need to be resilient in the face of these climate

crises.

Look, we've never seen anything like this before. And frankly, unless we address climate change head on across the world, we're going to see more

and more of these challenges and more and more of the intensity in rainfalls and flooding that we've seen before. We just have to work

together. And it's a shame that the federal government doesn't want to be a player there, but instead wants to stop that.

But the science will win out. Human nature tells us that we're going to have to face those challenges and hopefully, in time, become part of the

international dialogue again.

HILL: And the reality, too, is that the weather is going to happen whether people want it to or not.

Gina McCarthy, always appreciate your insight and your expertise. Thank you.

MCCARTHY: Thanks, Erica.

HILL: Meta and Amazon are now offering to help U.S. startups gain an edge in the A.I. race. They're going to provide Cloud computing and tech

expertise to 30 companies looking to build tools with Meta's A.I. model. That's Llama. The project could help Llama become the industry's open

source standard, and they're hoping, of course, it would encourage developers to use Amazon's infrastructure.

Clare Duffy joining us now with more from New York.

So how will this partnership ultimately work, Clare?

CLARE DUFFY, CNN BUSINESS WRITER: Yes. Erica, this is a really interesting sort of quieter but still really important front in the A.I. race here.

These big model-makers like Meta want to be the platform of choice for developers to build new chatbots and A.I. agents, other A.I. applications

on top of their technology. Sort of like the way that Apple and Google have been the platforms of choice for building mobile apps in the mobile Web

era.

That's what Meta wants to do, and that is why it is teaming up with AWS here to support a number of startups that want to build on top of its Llama

A.I. model. They're picking 30 U.S. startups to start. They will be getting six months' worth of hands-on support from engineers at both Meta and AWS,

as well as $200,000 each in Cloud computing credits from AWS. And that is really valuable because building this technology, the computing power that

it takes is really expensive, especially if you're a startup that isn't yet turning a profit.

And of course, as you said there, AWS stands to benefit as well if these startups remain using its Cloud computing technology after the sixth

months. So really a win-win potentially both for these startups, but also Meta and AWS in terms of trying to get their technology to be the default

for building new A.I. applications -- Erica.

HILL: Right. And getting it to be the default, right, that is -- that is clearly the push here in wanting to get out ahead of the competition when

it comes to A.I.

What else do we see in terms of what's coming down the pike from the company when you're looking at that?

DUFFY: Yes, I mean, Meta especially has been going full force in terms of trying to the dealer in the A.I. space. I spoke with someone within the

company recently who said Mark Zuckerberg wants to win, and they've been doing that in part by shelling out millions of dollars in these contracts

to lure top researchers away from other companies. They've recently hired from OpenAI, from Anthropic, from Google. They're creating this new A.I.

superintelligence team.

It also involved a $14 billion investment in the A.I. startup scale that included Meta hiring its CEO and a number of its top employees.

[16:40:07]

So they really are trying to build out this team that will lead them to the top of the pack here. And I think it's in part because Mark Zuckerberg has

a bit of a chip on his shoulder from the mobile Web era. He has been very vocal about being frustrated that Facebook and Instagram need to pay part

of the money that consumers spend on their apps to Apple and Google. He doesn't want that to be the case. He wants to be the default platform in

the A.I. era.

HILL: We will see how it all shakes out. Claire, appreciate it as always. Thank you.

DUFFY: Thank you.

HILL: Well, the CEO of the world's biggest spirits maker, Diageo, is stepping down after just two years in that role. Debra Crew has had to cope

with sluggish sales and of course the threat of rising tariffs. Diageo brands include Johnnie Walker Whiskey, Casamigos Tequila and Guinness Beer,

among others.

Here's CNN's Anna Stewart with more.

(BEGIN VIDEOTAPE)

ANNA STEWART, CNN CORRESPONDENT: Well, this is a major shakeup for the world's biggest spirits maker. Diageo announced Wednesday that CEO Debra

Crew is stepping down with, quote, "immediate effect" after just two years in the role. The company's stock has fallen about 44 percent since she

became CEO. It's been a bumpy ride.

There was a shift in attitudes towards drinking after the post-pandemic boom, coupled with geopolitical pressures, and U.S. President Donald

Trump's tariff threats. Then there were specific challenges. A slump in sales in Latin America. In the U.S., they faced a class action lawsuit

relating to tequila labels, and there were fears of a Guinness shortage here in the United Kingdom.

All this created a perfect cocktail of challenges for the drink maker. In May, Crew announced a $500 million cost cutting plan for the next three

years, with plans to potentially sell off some brands, even sparking rumors around the black stuff. What's next for the wide range of Diageo brands is

unclear. The company's press release says the decision for Crew's departure was mutual. The CFO Nik Jhangiani stepping into the role until a new CEO is

found.

Anna Stewart, CNN, London.

(END VIDEOTAPE)

HILL: That is going to do it for QUEST MEANS BUSINESS on this Wednesday in New York. I'm Erica Hill. Stay tuned. Up next "MARKETPLACE ASIA."

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