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Quest Means Business

Fed Holds Rates Steady Amid Dissents, Pressure from Trump; U.S. GDP Grows by Three Percent in Q2 Boosted by Drops in Imports; Airbus CEO on Trump Tariffs; Trump to Slap India with Tariffs, Plus Russia "Penalty"; Trump Raises Tariffs on Most Brazilian Goods; 8.8 Magnitude Quake Off Russia Triggers Tsunami Threat; Meta, Microsoft Stocks Rise After Hours on Earning; Birmingham, England Remembers Heavy Metal Icon Ozzy Osbourne. Aired 4-5p ET

Aired July 30, 2025 - 16:00   ET

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

[16:00:13]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Morgan Stanley close the day, E-Trade closing bell ringing on Wall Street and the

markets went down after Jay Powell started speaking and said that no decision had been taken or at least wasn't prepared to be drawn on a

September cut.

We've hit the gavel. I think we have, anyway, it all seems to be over. Off the worst of the day. Those are the markets and the main events.

Rare division within the Fed. The U.S. Central Bank holds steady, but two governors disagree and pushed for a cut in rates.

It was a strong quarter for Airbus, and yet the CEO remains frustrated by ongoing engine delays. Guillaume Faury is with me tonight.

And earnings from Microsoft and Meta are due any minute now. Once we get them, we will analyze and we will bring them to you during the course of

this program.

We are live in New York. It is Wednesday, it is July the 30th. I am Richard Quest and on Fed Day, as every other day, I mean business.

Good evening.

We begin tonight with a Federal Reserve shrugging off pressure from President Trump to lower interest rates. Instead, the Open Markets

Committee, the FOMC, held rates steady for the fifth meeting in a row. The target range remains four-and-a-quarter to 4.5 percent. It has been that

since December of the end of last year.

But, a big but. Cue drum roll -- two members of the committee disagreed, dissented. Heaven! They wanted to lower rates by a quarter of a percentage

point. It is the first time for many years that that has taken place.

Jerome Powell, the Chair, said there were strong arguments on both sides, but most felt it was important to guard against tariff-induced inflation.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: On the dissents, you know what you want from everybody and also from a dissenter is a clear

explanation for of what you're thinking is and what are the arguments you're making and we had that today.

The majority of the committee was of the view that inflation is a bit above target. Maximum employment is at target. That calls for modestly

restrictive, in my way of thinking, modestly restrictive stance of policy for now.

(END VIDEO CLIP)

QUEST: Now, the chair said U.S. GDP came in as expected. U.S. economy grew three percent. We've got that number today in Q2, significant improvement

from the 0.5 percent decline in Q1. It was driven by shortfall in imports as businesses pulled back. Remember, they stockpiled ahead of various

tariff deadlines, and those imports go against GDP because it is not home produced therefore, well, you see how it works out. So today's number is a

lot more realistic.

Matt Egan is in Washington.

Matt, the reasoning for not moving is clear, but the dissents were all focusing on the dissenters. Are we making too much of it? Was it -- I mean,

you know, reasonable people can come to that same conclusion.

MATT EGAN, CNN REPORTER: Well, Richard. We might be making too much of it, because I've got to tell you, the guy who is in charge here, Jerome Powell,

he does not sound sold on a September interest rate cut. Right? He didn't rule it out. But he did note that tariffs are increasing prices for

consumers. He noted there is still a lot of uncertainty here, and yes, he does face some pushback from inside this building, right, with two Fed

governors dissenting for the first time since the early 1990s.

But Powell -- I don't know. I mean, he doesn't sound like he is definitely in the camp of an interest rate cut at the next meeting in September and

who can blame him right now? I mean, there is still a number of major economic reports that are due out between now and that September meeting.

That's not to mention who knows how many tariff announcements and Truth Social posts that could completely change the picture.

So, he is leaving his options open, and that makes sense.

QUEST: And yet the idea of a quarter point. I mean, it is not groundbreaking and it is not going to be earth-shattering. I realize the

President wants one percent, he probably is not going to get that, but the idea of just a bit. What is the fear in that marble building of where you

are at the moment? What is the fear that suddenly if you cut a quarter, it will be off to the races?

[16:05:00]

EGAN: I think the fear is what happened three years ago, right? I mean, Jerome Powell remembers that the Fed was late to acknowledging the fact

that the COVID-related inflation was not transitory, and they got that wrong and that is one of the reasons why we saw a 40-year high in

inflation.

And I mean, let's not forget, Jerome Powell, he is thinking about his legacy. He knows he has less than a year left at the helm of the Federal

Reserve, and I don't think he wants to be remembered as the guy who got it wrong after COVID and then also got it wrong under immense pressure from

the White House to cut interest rates.

I just talked to Michael Block, a veteran investor, and he told me that he thinks that Jerome Powell, he sounds like a guy who does not want his

legacy to be bullied by President Trump, and Block noted that, I mean, it is kind of hard to make the case that the economy needs an immediate,

massive interest rate cut right now, nor do the financial markets do. Right?

And you still have U.S. stocks near all-time highs. You have meme stocks back. Crypto is going to the moon, and so, it is not all that obvious to

many economists and observers that the economy or the market really needs easier money from the Fed.

QUEST: He is in danger though. Whatever the economics of all of this, Powell is in danger of losing the public debate because, you know, we had a

meeting this morning and one of my colleagues who is looking to build a house or buy a house is saying why? Why aren't they moving? Why aren't

rates coming down? The economy is doing well. Well, of course, that's exactly right. They are not moving. It is cause and effect.

But it is very hard to make that argument to Middle America.

EGAN: It is. It is. And I think that Powell, he did acknowledge some of the struggles here. Right? I mean, he pointed to the fact that there is

downside risk to the job market. We know that that Jolts Report out the other day showed that hiring is at a one-year low. And so I do think Powell

made clear that he and his colleagues are thinking about what could go wrong in the economy and whether or not they might have to eventually lower

interest rates.

But I do think that he wants to make sure that they don't get this wrong, and they start cutting at a time when inflation accelerates because of

tariffs.

So they are, Richard, as you know, they are in a tough spot here.

QUEST: They are indeed. Good to see you, Matt at the Fed.

Now, as we continue, the phrase that keeps coming up, the economic uncertainty has caused turbulent balance between the hawks and the doves.

It is known as the balance of risks. The committee will carefully assess incoming data and the balance of risks.

So what is the balance of risks? Well, for the hawks who voted to keep rates steady, you have a labor market that is still very strong with

unemployment at 4.1 percent, and you've got trade policy that is threatening to raise prices. Inflation has ticked up.

But on the other hand, you've got inflation that is way down from its all- time highs. You've got an economy that is growing reasonably well and now the Fed has pressure to hold up for both sides from the President, as

President Trump of course is trying to put his finger firmly on the scales.

Which way will the scales go?

Lael Brainard is the former Vice Chair of the Fed. She also served as the director of President Biden's National Economic Council. Now, you said, you

told us that you would have been inclined to cut rates, but you would not have dissented. Is dissenting a big deal for the Fed govs?

LAEL BRAINARD, FORMER DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: Dissenting is a very big deal for members of the Board. It happens very

rarely. Now these members are both Trump appointees, and they have actually dissented in the last year. So it is less unusual for them.

Dissenting on monetary policy, however, is unusual and there is a lot of deference to the Chair, particularly at moments like this where the

decision between cutting today in July and waiting for two more months of data to see whether to cut in September, it is just a very finely balanced

decision.

QUEST: But if it is so finely balanced, why not just do it? Take a quarter point? I mean, what is the fear that suddenly you're going to be off to the

races? Inflations going to reignite. Is not the risk of this pressure cooker as great as not doing anything? Or is there a real fear amongst

policymakers that they dare not be seen to be even the perception of giving in to White House pressure?

[16:10:03]

BRAINARD: So I don't think that's what's going on. I genuinely believe that the majority, the large majority of members of the Federal Reserve do see

the threat to inflation from tariffs as being quite material, and we know that the last time tariffs were raised, a fair amount, which was in the

first Trump administration, it took four to six months for those tariff increases to really get passed through into consumer prices.

So the reason that the large majority of the members of the Open Markets Committee has wanted to give it a little more time is because these are the

crucial months when you're going to start seeing the effects of tariffs on prices, and you've got two more months of data that they will have in hand

before September.

So for them, that is the reason to wait. And of course, the labor market is still looking very balanced because unemployment is still 4.1 percent, so

they may not be as concerned about a weakening in the labor market.

QUEST: If we look at Michelle Bowman and Christopher Waller, both respected economists in their own fields and in their own right, if the numbers do

come in stronger than expected, they will look somewhat foolish in a sense of wanting this earlier rate cut. But on the other side, and I realize that

I am doing on the one hand, on the other hand, if you get to September and you know, all things being equal, we are where we are now, then doesn't it

become just about impossible not to reduce rates?

BRAINARD: Well, I do think that if the economy continues to be growing only modestly, as it has been, and you see that inflation doesn't go up very

much over the coming two months, and the labor market softens a little bit, I think that would make a very strong case to cut rates in September.

You know, the economy, we've got some data this morning, it is really only growing about one-and-a-quarter percentage point over the first half of the

year. So that's a much lower rate of growth than we saw last year and that would suggest that there is a rationale to cut, and so once there is more

data between now and September, that rationale is going to get stronger if inflation hasn't jumped up.

QUEST: What I am finding fascinating is that we've now got tariffs at the highest level, the average tariff since Smoot-Hawley, and there are still

some nations to factor in, and we've got you know, obviously with some stuff like the Brazilian 50 percent tariff, but by and large from an

average of three to an average of 17 percent, the economy seems to be able to take it at least, and I can hear you about to chide me by saying, yes,

Richard, for the moment it looks like it is taking it.

And that's really what this is, monetary lag, tariff lag, we simply just don't know.

BRAINARD: Well, consumers are a lot more cautious than they were this time last year. So consumer spending contribution is about half what it was. So

you are seeing that caution by consumers. But as you also know, we saw a huge increase in pre-positioning in companies bringing in goods in the

first quarter to get out ahead of those tariffs. And now, of course, that is what we are seeing being sold on store shelves in places like Walmart

and Target. So consumers are not getting the full hit yet, and retailers are going to take as long as they can before they start passing that

through, because they know consumers are sour on high prices.

QUEST: So back to the actual business of making the decision, did you -- when you were on the Board, did you always know going into the room how you

were going to vote? And even if you did know how you were going to vote, were there private moments where you agonized and thought, well, I could go

with this way, or I could go that way, and no amount of your staff putting in front of you this argument or the other argument or this bit of data or

the other bit of data, does it ever come down to what it feels like in the gut?

BRAINARD: It is very difficult at moments, and I imagine this meeting was one of those back in 2015 when I was relatively new on the Federal Reserve

Board, the Committee had not raised rates in a long time because the recovery from the Great Recession was so slow, and they got ready to raise

rates. The last month of 2015. And in my gut, I felt that this was too much for the economy, that the global economy was softening, it wasn't good for

American workers and business investment.

[16:15:07]

And ultimately I went ahead and supported that rate increase, but the Committee didn't move again for another year because it turned out to be a

quite soft economy.

So, yes, there are those moments where it is a very tough decision. You've got to try to figure out whether you go with the majority, support the

Chair, or whether you go with your gut.

QUEST: I am grateful. Thank you so much for joining us. Thank you very much, Governor. I appreciate you coming on the program tonight.

Thank you.

Now, some breaking news to bring to your immediate attention. A jury in the U.S. state of Colorado has found James Craig guilty of murder when he

poisoned his wife. The prosecutor said Craig, who was a dentist, killed his wife with a toxic mix of chemicals that he placed into her protein shakes.

He now faces life in prison without the possibility of parole.

In a moment, chief executive of Airbus is breathing a sigh of relief after plane makers have been given tariff exemptions in the new trade deal

between the U.S. and the E.U. He said everybody wins from this latest agreement.

(BEGIN VIDEO CLIP)

GUILLAUME FAURY, CEO, AIRBUS: It was important for us, it was important for the U.S. industry, for the European industry and we are glad that this is

the case moving forward.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

QUEST: The chief executive of the world's top aircraft maker, Airbus, has welcomed the new U.S.-E.U. trade deal. The terms include a zero for zero

tariff exemption for the aerospace industry. I spoke to Airbus' chief executive, Guillaume Faury about the deal.

(BEGIN VIDEOTAPE)

FAURY: We are indeed happy to see that this is the way forward. We saw that in the agreement between the U.S. and the U.K. and the recently over

the weekend, we heard that civil aviation parts and equipment and aircraft themselves will continue to be without tariffs. That was important for us,

but it was important for the U.S. industry, for the European industry, and we are glad that this is the case moving forward.

QUEST: As I look at your results, they are they are interesting. I mean, you are ramping up the commercial aircraft production, but there is still

this line, particularly with the 320s. We face persistent engine supply issues, my words, not yours.

[16:20:10]

You must be getting off by this by now, because, I mean, there doesn't seem to be resolution to a problem that's been around for too long.

FAURY: It is indeed frustrating for us. We've managed to bring the supply chain with us in this ramp up. We are producing the right level of

production rates on all our products. But on the A320 family, we cannot complete the production. We have to produce what we call gliders, meaning

finished airplanes without engines waiting for the engines to be delivered to us. And therefore, having us delivering to the final customers.

So indeed, it is frustrating. We are in interesting discussions with engine suppliers, CFM primarily, but also Pratt, expecting from them that they

would recover later in the year.

Both of those two engine manufacturers faced issues -- industrial issues in the first half of the year, so there are some specific reasons why they are

late this year, but we are indeed facing persistent problems on having engines in the right number at the right time, enabling our own production.

QUEST: Do you anticipate supply chain problems from your own production line, where we know there have been difficulties in the past, which have

delayed aircraft deliveries?

FAURY: The main reason for aircraft delays in the past was difficulties in the supply chain, and we have worked heavily with our suppliers to get back

on track, and today, with Airbus production capabilities or supply chain capabilities, we are where we want to be with one or two exceptions. The

main exception is indeed engines for the single aisle A320 family, the second one being Spirit that is holding us back on the speed of ramp up of

the A220 and the A350. And you know that we are in the process of buying some Spirit AeroSystems work packages back to secure the ability to ramp up

on those two programs as well.

QUEST: The vast majority of Airbus still remains the commercial division, but I notice if you look at the increase in revenues, its Defense that is

really ramping up in some sense. How much more do you think your -- how much more defense business do you think you're going to get as a result of

the increase of European government spending on Defense?

FAURY: We don't know precisely. We welcome the announcement of the increase of Defense budgets from NATO countries moving forward, so we have a

perspective, we understand much better the amount of money they will spend for Defense. We don't know precisely program by program, what it will look

like.

Now, this being said, we anticipate growth in Defense. You know that we have the growth in commercial for the reason we discussed before, the ramp

up of commercial production. So all in all, we believe that the share of Defense within Airbus turnover will remain roughly the same, roughly 20

percent, meaning Defense will grow at the same speed or similar speed than commercial.

QUEST: What is next in terms of aircraft? I look at the range. You've got a really good solid range of aircraft now. Hydrogen is obviously now off to

one side in terms of next generation. But if you had to look at what you believe will be the next major project in commercial aviation, where are

you going to put your firepower?

FAURY: Well, that's clear. We are focusing on the succession of the A320 family. It is a very successful product, but it is now a very mature

product, so we have to look beyond the horizon. We are preparing the successor of the A320 that we intend to launch the program around 2030 for

an entry into service of this product in the second half of the next decade.

And this aircraft aims at reducing very significantly the fuel burn, contributing to reducing CO2 emissions with an aircraft capable of 100

percent use of self of SAF, Sustainable Aviation Fuel. So we have a clear roadmap of what we want to bring, and that will come with a new propulsion

system.

We are cooperating with CFM on a program that they call the Rise Engine, which is an open rotor for better fuel efficiency. But we are also working

hard on improved wings, very significantly better efficiency on the wings of the future, reducing the weight by the use of new architecture, new

materials and these aircraft will obviously be more connected aircraft. The use of data and connectivity, enable a lot of things, including different

way of navigating and optimizing aviation.

(END VIDEOTAPE)

[16:25:24]

QUEST: The CEO of Airbus.

In a moment, allow me to tell you, please, about President Trump, who is now targeting Brazil with threatened tariffs over its prosecution of Jair

Bolsonaro. Mr. Trump's increased tariffs on Brazilian goods and the Treasury Department, U.S. Treasury, that is, has sanctioned the Brazilian

judge involved in the case. In a moment, I will tell you more.

(COMMERCIAL BREAK)

QUEST: Hello, I am Richard Quest. Together we will have a lot more QUEST MEANS BUSINESS. I will talk about Meta and Microsoft and their quarterly

numbers, we will break it down. And the Guru La Monica, will help us understand what it all means, and President Trump is threatening to

penalize India, secondary sanctions for buying Russian energy. We will discuss it after the headlines, because this is CNN and on this network,

the news, you better believe it, always comes first.

The U.S. Federal Reserve is leaving U.S. interest rates unchanged despite pressure from Mr. Trump to lower them. For the first time since 1993, two

Fed governors dissented. They had wanted to cut rates by a quarter of a point.

There were no major injuries reported after a massive earthquake near Russia that triggered tsunami waves. The threat led to evacuation warnings

for nearly two million people in Japan. The 8.8 magnitude quake is amongst the strongest ever recorded. It generated waves as far away as the U.S.

West Coast and the Galapagos Islands.

Fans of Ozzy Osbourne have been paying tribute to the rock star in his hometown of Birmingham in England. His family arranged a funeral procession

in the city where Osbourne first performed with Black Sabbath. He died last week at the age of 76.

[16:30:17]

President Trump is picking a fight with India, saying he may penalize the country for buying Russian energy. It's on top of a potential 25 percent

tariff on Indian goods. And the president is calling out India on social media for its massive appetite for Russian oil, even when he says everyone

wants Russia to stop the killing in Ukraine. The idea of Putin penalty could also have implications, of course, for China.

Phil Mattingly is with me from D.C.

A little late, you know, a lot of oil late. Bearing in mind that India has been buying this stuff from Russia at discounted prices and arguably even

selling it on further. But this isn't just about India. This is about secondary sanctions, isn't it?

PHIL MATTINGLY, CNN CHIEF DOMESTIC CORRESPONDENT: Yes, exactly. And Richard, you know this well, secondary sanctions have long been considered,

including in the last administration, and long been pushed to the side out of concerns for what the effect that it would have on the global oil

market. There is a sense within the Trump administration that because of where that market currently stands, obviously a very different place than

in a number of years prior, and because of Trump's genuine frustration and I think bordering on disdain for where President Putin has been and in his

rejection of Trump's desire to see a ceasefire or some type of substantive negotiation on the issue of Ukraine, he's ready to trigger them.

In fact, Richard, Scott Bessent, the Treasury secretary, made very clear behind closed doors to his Chinese counterparts in Stockholm yesterday in

the U.S.-China trade talks that they needed to be prepared for those secondary sanctions.

QUEST: Right.

MATTINGLY: Which, as you noted, would hit not just India but would directly hit China as well.

QUEST: Now, you see, in many ways, India is the precursor in a sense. China getting hit by secondary sanctions would be more significant because China

is a much closer ally to Russia. Yes, India is buying the stuff and has not gone on with sanctions and has not joined the West. But China has the great

alliance now with Russia.

MATTINGLY: And I think what's fascinating here, not only does China purchase more energy from Russia and has helped fill kind of their coffers

as they've taken hits from the Western sanctions regime that's been in place for several years, the inclusion of India's purchases of military

equipment in the threat that the president laid out on social media today, that is also a significant component.

While China has framed it as not military equipment explicitly, but the components and inputs that are tied to things that Russia needs for its

military operation, if he extends that on a secondary sanction basis, not just on energy, which would be significant, but also on, to your point, the

alliance has created a connective tissue on military equipment purchases, that would be a dramatic shift and a dramatic escalation.

QUEST: Right. OK. So I want to go back to your point about President Putin and Donald Trump. Is there now a feeling in Washington that President Trump

is going to break with President Putin, that he is going to do something dramatic? Because how many times can he threaten and not before he's --

before President Trump is weakened as a result of not acting?

MATTINGLY: Here's how I would frame things. People outside of the White House are skeptical and have every right to be so. They've seen this game

play out too many times before. Never, I think, to this degree, in terms of the president's very clear frustration. What I've been told from White

House advisers is not dissimilar to what the Treasury secretary told Chinese counterparts yesterday in Stockholm.

You need to take this seriously. This is not only something he's threatening. This is not only something that's a consideration. You should

expect this to happen. Whether or not that changes again, the president is the one who makes the final call here. But there is a real sense around him

in terms of his team that is in the room, not just people speculating about where he may go about things, that this is real and it's coming. We'll see

how it happens.

Obviously, you know better than anybody these things are often negotiating tactics, but it seems like his team is preparing for him to pull the

trigger.

QUEST: Phil, always grateful. Thank you, sir.

Now it's not only India, President Trump has raised tariffs on most Brazilian goods to 50 percent. You heard me right. But it's the reasoning

that's really extraordinary because the White House says it's in response to the prosecution of Brazil's former president, Jair Bolsonaro, a right-

wing ally of Donald Trump.

Bolsonaro has been charged with plotting to overturn Brazil's 2022 presidential election. It's also sanctioned the Supreme Court justice in

the case over what it's called serious human rights violations. Brazil's attorney general calls the move arbitrary and unjustifiable.

[16:35:08]

Lourival Sant'Anna is our international affairs analyst for CNN Brasil, joins me Washington.

The Brazilians must be spitting feathers at all of this. Bearing in mind, look, Brazil's a functioning democracy with a by and large independent

judiciary, and they are legitimate. And Donald Trump is now interfering in the internal affairs and ramping up with tariffs.

Go ahead, sir.

LOURIVAL SANT'ANNA, CNN BRASIL INTERNATIONAL AFFAIRS ANALYST: Yes. Yes. Sure, Richard, thank you for having me on. And yes, just as in Canada and

other places, this has stirred up nationalistic sentiments. Of course there is a share of the public opinion which follows former president right-wing

Jair Bolsonaro, who are in favor of the sanctions against the Supreme Court Justice Alexandre de Moraes, but are in favor of those sanctions but are

against these tariffs because they really are a damage to the economy of the country and especially to many millions of jobs and income that those

exports generate. We are talking about $40 billion a year.

QUEST: Right. So how is it going to manifest itself in terms of reaction? Because I see the attorney general saying, you know, we will have -- we

will -- the Brazilian attorney general, we will respond in a time and place and choosing of our own. What will they do?

SANT'ANNA: Well, what he's been doing is he's not backtracking. He keeps prosecuting the social media, prosecuting former president Jair Bolsonaro.

All these processes are in his hand, concentrated in this justice's hand. And he's been following up, every time there are some threats or even steps

made by the Trump administration, the Supreme Court has been going on if those prosecutions about alleged attempt of coup.

QUEST: But let me just -- but is there a feeling, and you know, you give us your assessment, in your view, will the Brazilian government attempt to

find a way out of this to avoid these higher tariffs, or are they just going to have to prepare for the pain that comes with it?

SANT'ANNA: Well, there is no political incentive to make a broad, a major gesture to, you know, do what President Trump is asking for because it has

to do with sovereignty and with the democratic institutions, the independence of justice. So they are trying, the Brazilian government, as

much as the sectors of the economy, the business people, are trying to negotiate to make concessions and to prove that this will be bad for the --

for the American consumers.

But there is now a very long list of exceptions. You know, all the products which Brazil exports, which are perceived as necessary for the American

consumption, public, they are an exception from that list.

QUEST: I'm grateful, sir, you and I will talk more about this as you help me navigate the ways forward. I'm grateful. Thank you very much.

Coming up, QUEST MEANS BUSINESS live from New York, tsunami warnings have largely now been downgraded. It was a massive earthquake that triggered

alerts across the Pacific, on all sides of the basin. Anxiety is now lingering. I'll have more details for you after the break.

(COMMERCIAL BREAK)

[16:41:45]

QUEST: Most tsunami advisories around the Pacific have now been downgraded after the massive 8.8 earthquake off the coast of Russia. It's one of the

largest earthquakes ever recorded, and there were higher than usual waves recently reported at Ecuador's Galapagos Islands. And people are warned to

stay vigilant. New Zealand is urging its residents to stay away from the water. Shoreline flooding on Russia's far eastern coast, which experienced

more than 100 aftershocks.

Chris Warren is with us tracking the developments, joins us now.

The thing I find fascinating about this one, indeed anything in the Pacific basin, is the way in which both sides, I mean, this thing goes thousands of

miles once the thing -- once the tsunami or once the waves get going.

CHRIS WARREN, CNN METEOROLOGIST: Yes. Richard, it really is interesting. And unfortunately what makes it so interesting can also make it so

dangerous and even deadly. Fortunately, that's not the case this time. And these are the alerts. You have to kind of look closely here in California

on the West Coast of the United States. On the other side of the Pacific Ocean these are advisories, extreme Northern California and Santa Barbara

County.

Now so this is for after the tsunami. You've got that kind of sloshing effect, and it's dangerous for people that are near the water or in the

water. So there's currents and maybe some rough surf. This is where the earthquake happened. And the key to this, it's huge. This is a top six on

record, tied for six strongest, most powerful earthquakes on record. But it happened -- you see the dot there is offshore. So for an earthquake to

create a tsunami it has to be on a part of the earth underwater.

And it's not just the shaking, it's how much of the land has been displaced or in this case, it wouldn't be land, it would be the surface, the sea

floor, so the earth, not the water, how much of it is displaced, so it's that bump. And we're thinking tectonic plates so huge masses, a big bump of

water, and it's going to radiate in every direction.

Now there's going to be focal areas that are a little bit stronger, like going, if you're pushing the water like this, it would be stronger right in

the middle, but there'd still be waves on the outside. So initially what will happen is as -- here's something else, Richard. As the wave is moving

across the Pacific Ocean, it's moving as fast as a commercial jetliner and it's barely even noticeable if you're on a boat in the middle of the

Pacific Ocean.

The key is all that wave energy a lot of it is underneath. Wind pushes the top of the water, but this is underneath. It's when the wave gets to the

shore is when that's when you get that surge. And it's not always just like this. It's not always just one surge. It can be pushes of surge.

So here's the forecast as it was issued after the earthquake five hours, 10 hours, 15 hours, and Richard, this is where we are right now. So we're now

into the southern hemisphere for the areas that are more likely to see some water rises. And for Hawaii and coastal United States, the highest amount

we've seen, highest levels, Richard, 5.7 feet there in Maui, Kahului.

QUEST: Now, if you're on -- if you're on a boat in the middle of the ocean, you don't really notice it, do you?

WARREN: No.

[16:45:01]

QUEST: Because it's all underneath you. And how much -- I realize we won't know this necessarily, this number, for some time, but you talked about the

displacement or the shifting. What sort of amount does it move? Are we talking hundreds of feet? Two and a half inches that's magnified? Do we

know anything like that?

WARREN: That would be very difficult to say, but you can think it's not just like, you know, part of a room. We're talking parts of continents. So

even a level rise, like, say, this much times that by, you know, a big portion of Russia, that's a lot of water that's getting lifted up. And so

it's -- yes. And that's another reason why it's hard to predict -- just based on how strong the earthquake is it's hard to predict how much of a

rise there's going to be with this tsunami, because you really don't know what's going on underneath there.

Is there more side to side movement that's causing that 8.8, or is it that big thrust, that mega thrust that gives that wave underneath? Yes, it

really is fascinating and scary, too.

QUEST: Thank you. I'm grateful. Thank you, sir.

WARREN: Thank you.

QUEST: As QUEST MEANS BUSINESS continues, two tech giants. Now that's interesting. Look at that. Meta is up nine. Microsoft up nearly seven.

Earnings. Earnings. The competition and dominance of A.I. I think we need Clare Duffy in a moment. Well, we will. Well, no, we'll have Paul La Monica

as well in a moment.

(COMMERCIAL BREAK)

QUEST: Strong gains for Microsoft and Meta. After hours, the two announced earnings. Microsoft reported higher than expected revenue on its A.I. and

Cloud divisions. Meta also beat, it rose more than 20 percent year on year.

Guru La Monica, senior markets analysis writer at Barron's.

All right, pull them apart. Let's do Microsoft first. I mean, it's -- it's cloud. It's -- but where's the A.I. in all of it?

PAUL LA MONICA, SENIOR MARKET ANALYSIS WRITER, BARRON'S: Yes, I mean, this is an impressive, you know, number, Richard, Microsoft like many other

companies being looked at for not just what they are offering with regards to A.I., but also how much they are spending on artificial intelligence

being one of these, quote-unquote, "hyperscalers." And I think there is a lot of optimism that the company is still flush enough to continue

spending, reporting extremely strong growth from Azure and other Cloud businesses.

And, you know, that's probably a good bit of news for companies like Nvidia and other, you know, chip companies that are in the A.I. arms race as well.

[16:50:10]

QUEST: Meta, different story. This 20 percent. I mean, most of Meta's businesses now are quite mature but they're going against A.I. and they've

created this new black arts division within their campus. And spending a lot of money. So why the good performance on Meta?

LA MONICA: Yes. Meta really continues to be the place where, you know, if you want your social media needs met outside of TikTok, you've obviously

got Instagram. You have WhatsApp, you have the core Facebook, you know, platform, which, you know, many people might joke is mainly for older users

like yours truly but, you know, I think that Meta continues to post extremely strong advertising growth.

It is for all of the problems it's had in the past, maybe with being not perceived as a quality place for advertisers. I think a lot of that's

dissipating, and Mark Zuckerberg has done a good job of reassuring advertisers that if you want to have a marketing story, do it at Facebook,

at Instagram, at Reels.

QUEST: But I -- back to Microsoft finally. I think Microsoft is one of the most impressive companies, bearing in mind, you know, whether it's Windows,

the operating system or Office and the suite that so many of us use, or it's now the Azure, the Cloud. I mean, with the singular exception of the

phone where they royally screwed that up, by and large, Microsoft, under its -- Satya Nadella, has pulled itself back and absolutely going

gangbusters.

LA MONICA: Yes. I mean, Microsoft is, you know, at this point the world's second most valuable company, you know, trailing only Nvidia. And I think

you're right, Richard. This is a company that has made a lot of smart moves to boost its Cloud presence. So, you know, also it's not as big of a part

of the business. But don't forget things like LinkedIn as well. I think, you know, Microsoft definitely gets, you know, criticized by some as not

having as strong of a mobile presence or as strong of a social media presence, but that hasn't really been a problem for the company.

I think right now when we might get a little bit more color from Apple tomorrow when they report their results, Apple is clearly the company that

Wall Street is worried about being behind in A.I. to an extent that, you know, Wall Street doesn't view Microsoft and Meta in that same fashion. And

we've got this bifurcation now. It's no longer the case that all the MAC 7 go up together.

Apple has been a laggard. Tesla has obviously been a laggard for numerous reasons that we need a three-hour show to probably go into.

QUEST: Well, we'll arrange that. We'll talk about that. Thank you, sir. It's good to see you, Guru Paul La Monica.

LA MONICA: Thank you.

QUEST: Fans of Ozzy Osbourne lined the streets of Birmingham in England to say goodbye to the heavy metal singer.

The funeral procession passed local monuments dedicated to Black Sabbath, the band that propelled Osbourne to stardom. It was led by a brass ensemble

playing Sabbath's "Iron Man." His widow, Sharon Osbourne, obviously and visibly moved as she waved to the crowd. Ozzy Osbourne died last week at

the age of 76.

Elizabeth Wagmeister has been covering the story. It is -- it's good to see him being buried back in England.

ELIZABETH WAGMEISTER, CNN ENTERTAINMENT CORRESPONDENT: It is, you know, a really touching tribute to him right there in Birmingham in his hometown.

And, you know, the family actually paid for this funeral procession, Richard. So clearly they knew that this wouldn't just mean a lot to them to

see their dear Ozzy being honored. But they also knew that this would mean a lot to the fans.

In fact, the Lord Mayor of Birmingham, I want to read you part of the statement that was released. They said that he was more than a music

legend. He was a son of Birmingham and that it was important to the city that we support a fitting, dignified tribute ahead of a private family

funeral. We know how much this moment will mean to his fans.

And I agree with you. It is so nice to see him being honored in the U.K.

QUEST: It is a world apart and so many groups. I mean, look, I'm familiar, very familiar with Birmingham. There are so many -- it's so easy to turn

your back on your history, particularly when you've really made it and you've got Hollywood and you've got reality shows. It's so easy to forget

from where you once came.

[16:55:05]

WAGMEISTER: It's such a great point, and I'm so glad that you brought this up, Richard, because you are absolutely correct that many celebrities, they

forget where they come from, or at least they don't publicly speak about it. But for Ozzy, the complete opposite. In fact, it isn't just this grand

funeral procession today that he did in Birmingham, his final performance, which, you know, was just a few weeks before his passing.

July 5th, he took the stage for a performance in Birmingham. It was very important for him, clearly to pay his respects to where he came from and to

really the city that made him. Black Sabbath was formed in 1968, just there. So he had this performance in his final days. It was labeled and

billed as the final Black Sabbath performance. Now, at the time, the fans did not know, of course, that that meant that Ozzy would be gone so soon.

But Ozzy's health was very much deteriorating. He could not stand, he couldn't walk, but he sat on a throne on stage and was adored by thousands

of fans.

QUEST: I'm grateful that you're here with us today to tell us about it. Thank you.

QUEST MEANS BUSINESS. We will have a "Profitable Moment" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment."

Let me -- let me let you into a little secret. The U.S. economy does not need a cut in interest rates, which would certainly be nice for those who

might be building a house or buying a car, or simply finding their own pocketbook under pressure. Yes, half a percent. A quarter percent off would

be good. And that's why today's two dissenters, first time we've had two since 1993, is significant because the chair, although in the majority, is

now under pressure both from his own committee and from Donald Trump.

But unemployment is under control. Inflation is still elevated growth, as we saw today, is better than expected. So if you ask me, does the U.S.

economy need an interest rate cut? The answer has to be no. It's going to get it probably in September and again, maybe November, December, two

before the end of the year, if only to quell the critics. But overall, inflation is still a worry. And we do not know the effects of the tariffs.

No, we don't. You may think you do, but we do not yet know what that effect is going to be.

And that's QUEST MEANS BUSINESS for tonight, this midweek edition. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope

it is profitable. Let's get together this time tomorrow.

END