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Quest Means Business

Trump Calls for Fed Governor Cook to Resign; Bessent: Looking at 11 Candidates for Fed Chair; Tech Stocks Slide Amid Worries About Spending on A.I. India Imports Less Russian Oil After New U.S. Tariffs; Overseas Arrival to U.S. Down This Summer Compared to 2024. Aired 4-5p ET

Aired August 20, 2025 - 16:00   ET

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

[16:00:05]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street, not! It is in Texas. There is the Governor of

Texas, Greg Abbott celebrating the launch of the NYSE Texas. They're doing it down in Texas, so you can see, a bit of an all over the day for the

markets, although you're seeing the Dow is just up slightly, the NASDAQ tells a very different story.

Texas and the New York Stock Exchange closing bell rang. Those are the markets and a very busy day for events that you and I need to talk about.

President Trump renews his attacks on the fed. He is calling for yet another top official to resign. In a moment, the former St. Louis Fed

President James Bullard will be with me live.

Target's chief executive resigns after 11 years, failing to pull the company out of a sales slump, and the market goes down even further.

And U.S. tech stocks fall for the second day. An MIT report raises fears of an A.I.-fueled bubble. You're going to hear from the Nobel economist, Paul

Krugman, who is with me during the course of the show.

Live from New York on Wednesday, midweek, August the 20th. I am Richard Quest, and I mean business.

Good evening.

The Federal Reserve, the U.S. Central Bank, once again under intense scrutiny as President Trump takes new efforts to reshape the Central Bank.

Mr. Trump is calling for the Fed Governor Lisa Cook, to resign after one of his allies alleged that she has committed mortgage fraud.

Miss Cook has consistently voted with the Chair, Jerome Powell. It follows the Fed Minutes giving new details over the rare division with the Fed. Two

governors, of course, gave dissenting votes to lower interest rates at the last meeting. The administration says the interviews for the next Fed Chair

will begin in the coming weeks.

One of the reported candidates, Mr. Bullard is with me.

Kristen Holmes is at The White House.

Nothing happens by accident. This assault on Lisa Cook is because she is alleged to have committed mortgage fraud, claiming primary residence on two

mortgages in short order, she denies. But the President is really going for it.

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Yes, and it is not just the President. I mean, clearly his allies are involved in this full court press

around the Federal Reserve. I mean, this is all about President Trump's head of Federal Housing Finance Agency. This man named Bill Pulte and he

has written a letter now to the Department of Justice telling them to investigate potential mortgage crimes, specifically, as you noted, two

mortgages that Lisa Cook pays, saying that they believe, Pulte, that she has committed a crime.

Now, of course, you also heard from Pulte at one point saying, oh, this has nothing to do with President Trump's quest to try and lower interest rates,

to try and get Jerome Powell out of office, but everything is connected, particularly in Trump's orbit.

One of the things that we've seen is that they are using multiple avenues to try to put the pressure on these Democratic appointed governors, as well

as on the Chair himself, Jerome Powell. Obviously, we've seen that with his team going over there, making accusations around the new Fed building, and

so, this is all part of that.

And one thing to note, there is actually two parts of this. One is that if she does resign or if she does leave, then there will only be two

Democratic appointed governors left on the board. But the other part of this that is interesting is that Pulte is now posting on his Twitter

sections of what appeared to be the by-lines about removing these governors, and one of it says that she would have to resign or if the

President has reason, he could remove her from this post.

And now you have Pulte writing out there that he believes there is reason for Trump to remove her from this post.

QUEST: Kristen, is there any anybody, any thought, any squeamishness that they are essentially attacking the first and only female Black governor at

the Federal Reserve? And, you know, I am not suggesting for a second that if the allegations are true, they shouldn't be put forward with full

ferocity, but there is a sort of a doubt about the allegations and at the same time, they are attacking somebody which might not look good in certain

quarters.

HOLMES: Yes, that's certainly true, but it doesn't seem as though the administration cares at all about those kind of optics. They have one thing

on their mind right now, and the same thing that President Trump has been talking about for months, which is how can we make this work for us,

particularly, how can we lower interest rates?

[16:05:04]

And it has been clear and made clear by the chair, Jerome Powell, over and over again, that he is not going to lower those rates. So now, they are

looking for loopholes around this to try to get him out, to try to pressure him, to try to get other governors out, particularly these Democratic

appointed governors.

I think in terms of optics, they are not really worried about what this looks like. They are looking for opportunities and trying to look for other

pathways that might lead to the potential resignation or again, if they can find that these allegations are true, the ability to have President Trump

force her out.

QUEST: Kristen, I am grateful, thank you, at The White House this evening.

Now, the allegations come at a time of great uncertainty at the Fed. The U.S. Treasury Secretary, Scott Bessent, says there are now 11 candidates to

replace Chair Powell and those interviews will begin around Labor Day.

CNBC is reporting the list includes the former Fed officials, prominent economists and others.

Jim Bullard is one of those under consideration. He is the former President of the St. Louis Federal Reserve, currently serves as the Dean at the Mitch

Daniels School of business at Purdue.

Mr. President, all right, you know, I often leave the difficult or tricky question to the end, but let's get it out of the way right at the beginning

so that we can get down to brass tacks of economics.

If offered, would you serve -- do you expect to be interviewed? Tell me what you'd like to tell me about the possibility of you being the Fed

Chair.

JIM BULLARD, DEAN, MITCH DANIELS SCHOOL OF BUSINESS AT PURDUE: I have been in contact with the Treasury Secretary and the Treasury Secretary's Office,

and we will get together for an interview in the coming weeks after Labor Day, but at this point that is still under construction. I've said that I

would accept the job as long as we were set up for success, which I would define as defending low and stable inflation in the United States,

defending the reserve currency status of the dollar, and defending the independence of the Federal Reserve. So, those three conditions would have

to be met.

But yes, I would accept.

QUEST: What do you make of this Lisa Cook business? The allegations have been made. The pressure is on.

I suppose the question is, should she resign?

BULLARD: The DOJ would have to decide if they want to look into this further. They have many things on their docket. This would have been

reviewed as I understand it, when she would have been confirmed for the Senate, so I think you'd want to look at that again and see where that's

at.

So you know, I think the mere accusation maybe is not the right moment. You'd have to check this out further.

QUEST: Let's talk on firm ground of economics now. You are -- you're nailing your colors firmly to the mast on tariffs and inflation are one off

shock and you don't believe that that's going to feed into a spiral of inflation.

But even so, as a one off shock, you still regard there to be room for cutting rates sooner rather than later. Correct? Is that right?

BULLARD: I've said that the policy rate is somewhat high for the situation. So I think that the committee does have room to move the policy rate lower.

I've suggested a path of 100-basis points over the next year. I think that, you know, if you take typical rules that are used and calibrate this, you

would find that you get the current policy rate a little bit higher than what you would really need to fight the remaining bit of inflation that

remains above target.

So I think that's why the committee has room. I think they'll go 25 basis points in September and they will make too many promises, but I think

they'll end up going another 25 basis points in December and then what I am suggesting is they continue that into next year. If the data cooperates,

you can move that up and move faster.

QUEST: So if you do that, I mean, are you in the school of thought that says, well, over the long term the two percent et cetera., et cetera., or

would you be in favor of changing the inflation target because there comes a point if, let's say you lower rates by if you want up to a hundred basis

points, that is certainly going to put some petrol on the flames, as we would say.

[16:10:00]

And it will make it almost impossible to get back to two percent in the medium term.

BULLARD: I would definitely not change the inflation target. I think that's become an international standard. I think if the United States went off

that international standard, you would set up a period of chaos like the 1970s where you had high and variable inflation, really around the world.

It took years and years to get that under control. So you really don't want to go back to anything like that.

The two percent target, though, I think can be hit and will be hit, but you want inflation to asymptote slowly and nicely into the two percent target

and that's why you have a little bit of room to bring down rates toward the neutral rate, closer to neutral as inflation continues to come down toward

target.

And like I say, if the data doesn't cooperate, then the committee has to adjust that plan, but that's the basic plan at this point.

QUEST: I was interested, one of your -- I was going to say preconditions for top job at Fed is the independence of the Fed, and yet at the same

time, this onslaught of attacks from the administration against the Chair, now against one of the members, but let's stick with the Chair for the

moment.

How do you reconcile that? I mean, yes, the President is entitled to fire, you know, as many verbal volleys as he likes, but it doesn't do much for

the morale of the Fed or indeed, the public perception of the Fed.

BULLARD: Yes, the Fed does what it does and acts like it does because of the Federal Reserve Act, so this is all occurring under U.S. if the

administration and the Congress want to change the law, they certainly can do that and they have done it a few times in the past, but basically,

they're very happy with the arrangement, and so I think that we all need to respect that arrangement and make monetary policy according to this,

according to the Act, that means that the decisions are made by the Federal Open Market Committee. The members are appointed according to the rules.

They roll over on a slow basis, partly to stay at arms' length from day-to- day politics.

If you let day-to-day politics come in, that's a very noisy process. Then you get noisier policy -- noisier rates in markets and investors have to

protect themselves against that. You get the risk premium rates. Everyone is paying higher rates all the time. You don't want that.

So you want a smoother process. I think the law provides that. Congress has looked at it many times over the years, and they are pretty happy with it.

So I think we all have to settle down and say, well, that's how we are going to make policy.

QUEST: Right. Sir, if you are selected, I hope we can look forward, if you are given the nod and touched by the sword, as they say, I hope you will

come on QUEST MEANS BUSINESS at some point during that term of office. But even so, whether or not, you always have a standing invitation to come and

talk to us here, sir. I am very grateful for your time tonight.

BULLARD: Well, thank you very much. That's very kind.

QUEST: Thank you.

Now, let's look at what is happening with tech stocks. A slump over the last couple of days and the underlying reason is whether A.I. can live up

to the hype.

Paul Krugman, the Nobel winning economist. There he is. Paul will be with me after the break. He has got some very interesting views on power, A.I.

and its ability to stay the course, in a moment.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: It's pretty brutal. Tech stocks are on a two-day losing streak as more investors are questioning the A.I. and hype, and whether it can live

up to it. The NASDAQ is down more than half a point. It has now pulled back 2.5 percent since the last weeks record highs, and some of the concern

comes from an MIT study, Massachusetts Institute of Technology, the authors say most companies have found no way to make money using, excuse me,

generative A.I.

The head of OpenAI also seems to be tempering expectations, he reportedly told tech journalists, investors are overexcited about the technology.

Paul Krugman is with me now, Nobel winning economist. He recently wrote that A.I. could be a short term risk to the economy, considering all the

power it uses.

It is an interesting one, Paul, good to see you, sir, thank you. Because nobody doubts the significance of the contribution A.I. will make in the

future. But to your point, we seem to be ignoring the costs of actually doing it and the difficulties of doing it and the profitability of doing

it.

PAUL KRUGMAN, ECONOMIST AND COLUMNIST, "THE NEW YORK TIMES": That's right. I mean, this is -- we've seen this cycle, you know, many, many times. I

think the first example would probably be the canal mania in Britain in the 1790s. People got overexcited about new technology. It is a good new

technology. It will do real things, but it takes a while to figure out what to do with it. And you can lose a lot of money in the process, so you can

have a bust before it really gets applied.

And then we have this additional problem, it is as if you were building canals in the 1790s, and there actually wasn't enough water to fill the

canals. Right?

So, we have an addition to the question of whether the technology is really fully ready for prime time, and whether we actually have the resources to

go along with it.

QUEST: I am fascinated by the point you make in your article, which is it is even worse at one level because not only is there going to be a

requirement, a huge requirement for data centers and an extraordinary requirement for power that we know, but this administration, the Trump

administration, is cutting off the sustainable power future -- solar, all the other renewables -- by not investing in them.

KRUGMAN: That's right. They are cutting off the subsidies that were being used to construct, but they are also actively trying to block. We just saw,

the Trump administration is taking away areas of the ocean that were being set aside for wind farms. We are seeing active interventions to try and

block solar farms. We just had a post from the President about blaming solar and wind power for rising electricity prices, which is complete

nonsense.

So you have an administration that is actively hostile to renewable energy, which has accounted for almost all recent additions to generation capacity.

QUEST: When and where does it all sort of fall apart, in your view? I mean, we all -- those of us of a certain age dot-com boom dot-com bust, are you

foreseeing something similar with A.I. rise, A.I. fall?

KRUGMAN: It seems quite likely. I mean, you know, predictions are hard, especially about the future. But this does definitely have a lot of the

feel. I mean, it feels to me like were partying like it is 1999, that we have enormous enthusiasm.

[16:20:14]

And the one thing that that is seeming to be, you know, beyond what is justified by the business prospects, the technology is amazing, but the

business prospects, we are not so sure. And, you know, we have an economy where half of recent growth is basically data center construction. It is a

sluggish, slowly growing economy. We are not that far above stall speed, and half of our growth is coming out of these data centers.

So if we are seeing -- we don't have to -- we don't have to decide this was a bad idea. They just have to lose some of their enthusiasm and we are in

trouble.

QUEST: Right. But the difficulty that I have with the truth with which you speak is that at the same time, I also know from experience of the

internet, go back to the 1990s dot-com boom and bust, but the internet is now a fundamental part of the global economy. It just all happened a lot

slower than everybody had anticipated or expected, and people lost a lot of money on the way.

Is that likely to be the prognosis with A.I.?

KRUGMAN: Quite possibly. On my Substack, I put up one of those old "Quest" ads, some of us may remember where they had these, you know, marvels of the

internet. You can go to a grungy motel room and watch any movie ever made and we basically live in that world. The problem was that everybody who was

investing hundreds of billions of dollars on that prospect back in 1999- 2000 lost their money.

QUEST: Right.

I want to just talk about the Fed and all of these rumors of who is going to get the job, who is going to get it. I mean, the independence of the

Fed, particularly you're seeing today, of course, the story of Lisa Cook being pressured to resign.

The independence of the Fed, it is hard to gauge how much damage to the fabric of integrity is done by this onslaught of attacks. How much do you

think is being done?

KRUGMAN: Well, I think it is very serious. I mean, I am extremely worried. You know, we got through. We had a miracle.

You know, in 2022, we had high inflation, lots of people thought it would be very expensive to get it down, that we'd have to go through years of

high unemployment. Instead, it was basically painless.

I mean, inflation came right back down to the -- you know, 2.5 percent or so range without any bulge in unemployment. A lot of that had to do with

the credibility that an independent Fed had built. People basically believed that inflation would not persist.

If we undermined Fed independence, then were in big trouble.

QUEST: Jim Bullard, who you know, speaking on this program a few moments ago, said he did not believe the tariffs were inherently inflationary. He

did see inflation as being the problem in the medium -- short to medium term, and that he could foresee up to a hundred basis points in interest

rate cuts, without stoking inflation. Do you buy that?

KRUGMAN: No. If he doesn't think that the tariffs are inflationary in the short run, that disqualifies him for the Fed Chair. I mean that's -- it is

obvious, it is very clear and we are seeing it in the data that the tariffs will raise prices. They will raise prices maybe one-and-a-half to two

percentage points.

Now whether that will get entrenched in inflation, that's much more arguable. It may be that this is something that the fed should look

through. That's an argument that you can certainly make.

I understand that, you know, Waller, for example, has made that argument. But if you think that it doesn't raise prices at all, boy, that shows a

fundamental misunderstanding of what is happening as we speak.

QUEST: Maybe I am paraphrasing him wrongly. I suspect it is the latter that he thinks it is a one-off shock. It is not going to feed into a spiral of

inflation.

KRUGMAN: Yes, we don't know that. I mean, and the Fed needs to be both aware of that possibility, but also not assume that that's right.

So it is a very hard time to make Fed policy. It does not help to have the President making -- demanding 300 basis points of cuts, which is what he

has been saying.

QUEST: Paul, it is great to see you and thank you for joining us and your Substack is always most definitely worth reading, and we will show the

details of it in a moment. Thank you, sir, for taking time to talk to us. Thank you.

Now, the Chief Executive of Target is stepping down after 11 years and the company, the shop, the store is going through a rough patch. So Brian

Cornell's departure had been expected.

The company is dealing with weak sales, along with a backlash over its decision to end diversity initiatives. Now, the COO, Chief Operating,

Michael Fiddelke, will take over in February. Some were hoping that it was going to bring a new retailer from outside, so the stock is off quite

sharply today.

[16:25:07]

Nathaniel Meyersohn is with me in New York. Weird one, this, in a sense, Nathaniel, because the CEO is gone because he wasn't performing very well.

The COO, who was his right hand man, gets the job, arguably, I mean, out of the pan, into the fire.

NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: Yes, Richard, this is a weird one we have here. And it is also just such a reversal for Target, really

over the past decade.

So the Target current CEO, Brian Cornell, turned this company around when he first came in in 2014. You know, when he first came in, there were real

questions about whether Target would survive in the long run. Target did really well his first several years.

In 2019, actually, we named -- CNN Business named him the CEO of the year. In 2020-2021, during the pandemic, the company boomed, really was on par

with Amazon, Walmart, Costco. But it has been a really tough few years for the company beginning of 2022, it has faced slumping sales backlash over

the DEI retreat, which really kind has made a major impact this year.

And instead of blowing up the model, the board at Target is basically saying, let's try to right the ship with somebody who has been at the

company for 20 years in Michael Fiddelke and that is why you're seeing the market respond so poorly, and the stock down another eight or nine percent

today, because you have a lot of voices that were saying, hey, Target needs to bring in somebody from the outside, maybe kind of like Starbucks did.

QUEST: Right, but one assumes the board took all of that into consideration. I mean, you know, they weren't fools and they said no, even

allowing for all of that, the strategy is right. We are better sticking with this guy.

MEYERSOHN: That's right. They think that somebody who knows the business, has been part of the business for a long time, actually started as an

intern will be able to turn it around, so they think that maybe it is only smaller tweaks that are required, not kind of a fundamental structural

change to the business and they didn't want to go through the process of bringing in someone else who was going to have to take time to learn the

business, and may set back Target even further.

QUEST: Right. But you cover retail in detail, if you will, so what is the problem with Target?

MEYERSOHN: Richard, the problem with Target is it is a brand identity crisis. It is a brand identity problem. What does Target stand for? How is

it different than Walmart and Amazon and Costco?

For a long time it was of the Target image, it was the cheaper, you know, affordable home goods clothing, but now Target's prices are a bit higher.

It is merchandise is, you know, you go into stores, they are a little bit messier than they used to be.

And meanwhile, Walmart and Amazon -- you know, Walmart is doing better than it ever has and Walmart really is its kind of chief competitor, so Walmart

is doing well, Target is struggling and then you know the DEI thing, I think we need to spend a minute there because Target really leaned heavily

into DEI.

It was kind of, you know, it is Minneapolis based, it really took a firm stand in 2020 after George Floyd's murder. And then earlier this year, it

backtracked on some of its DEI policies, and so then it faced, you know, this huge boycott. Target is a little bit more of a progressive image than

Walmart, so it really struggled with those progressive consumers.

QUEST: Nathaniel, I am grateful for. Did you know, I bought my first -- it wasn't even a Walkman in those days, portable radio with headphones from

Target in -- now, you may laugh, young man, in 1983.

MEYERSOHN: You will not find those on the shelves anymore, Richard.

QUEST: Funny. I was going to take it back. It stopped working.

All right, thank you, sir. Great to see you. Thank you very much. I didn't -- I spared him the blushes of whether he was even alive in those days.

After a long haul flight, just the long lines at immigration. In a moment, the Booking Holdings CEO is urging the U.S. government to speed up this

process. There he is. I might ask. Well, I will ask him, it is not just the U.S. that needs to do it. There are many more governments, many more

bureaucrats.

Look, we will talk about it after the break.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[16:32:46]

QUEST: China appears to be picking up some of the slack as India is cutting back on buying Russian oil. According to analysts, Chinese refineries have

secured at least 15 cargoes of Russian crude from ports that typically are sending the stuff to India. President Trump's U.S. tariffs on India this

month, punishing it for supporting Russia's economy.

Anna Cooban, those would seem to be working in a sense. But now it's being picked up the slack by China.

ANNA COOBAN, CNN BUSINESS AND ECONOMICS CORRESPONDENT: Yes. And, you know, Capela is a data commodities firm. They say in their words that this is an

opportunistic move by China which is really sort of swooping in there and picking up barrels which -- from Russia at around a $3 per barrel discount

compared to the ones that you can get currently from the Middle East.

Now, Capela also said that it doesn't really think that China can fully compensate for the amount that India has been buying from Russia. Now,

let's remind ourselves that India has been really snapping up those barrels since the war in Ukraine. Russia has gone from one supplier of many to the

top supplier, accounting for around 36 percent of India's oil imports. So a really big shift there over the course of the Ukraine war.

QUEST: But the -- I mean, the India purchases were largely at the behest of the rest of the world, mainly because of the cap situation. But the

likelihood of secondary sanctions on China over buying Russia oil, I mean, is anybody talking about that?

COOBAN: Well, you're really right to point this out. There has been a bit of a disconnect between the amount of pressure we've seen Trump exert on

India. He's saying that he wants to put a 25 percent tariff on top of an already 25 percent tariff on India at the end of the month, as punishment

for buying Russian barrels. But we haven't heard much about China, which has also been really swooping in and taking those barrels from Russia.

Now it's anyone's guess as to why we know that China and the U.S. are currently in a 90-day truce where they're working out a more formal trade

agreement. Perhaps the threat of a secondary sanction might be scuppering that. Who knows? It's anyone's guess. But it is interesting that last

Friday, Trump did say to FOX News that he wouldn't immediately consider secondary sanctions on China, but that he might do in one to two -- sorry,

two to three weeks. So, you know, we're going to have to wait and see here.

[16:35:04]

QUEST: And meanwhile, the oil gets pumped and it goes instead of India, it goes to China. And there's no sign of India sort of deciding to go back

into the market.

COOBAN: No. Well, India has come out to say that it, you know, feels very aggrieved at being singled out here.

QUEST: Sure.

COOBAN: It feels like it's been -- it's a very unjustified punishment from Trump and has pointed to the fact that European Union, which we know has

banned seaborne imports of oil has also continued to buy Russian liquefied natural gas. So I think it's understandable that India would feel pretty

peeved right now.

QUEST: What's that old phrase? No one comes to the table with clean hands.

Anna in London tonight. I'm grateful. Thank you.

Now, over the last year, as you'll be well aware, I've been to my fair share of airports. Malaga, Kennedy, Heathrow, Lisbon, Rome. They all have

one thing in common. Long lines. As followers on my social media accounts know, I make no secret of the frustration that I face when getting off a

plane. Another immigration -- that's not it. The one I was tweeting there was T-8 at Kennedy. It was extraordinary.

The chief executive behind brands like Priceline, Kayak and Booking.com is Glenn Fogel. He's calling on the U.S. government to streamline the painful

process of immigration. And his company has already seen slow growth in the U.S. market for months. Glenn is the CEO of Bookings Holdings. He's with me

now.

I know you've made the comment about the U.S., but one could just as easily say about all those other places, couldn't we?

GLENN FOGEL, CEO AND PRESIDENT, BOOKING HOLDINGS: Well, thanks for having me, Richard. And you're right, in certain parts of the world, definitely

very slow to get through the airport. Some places actually very fast. It's really the investment one is willing to make. It's nice to see in the U.S.,

the current administration has recognized this. They have put money behind their latest bill. They are investing in it. And this is not something that

just came around today. This has been a problem for many years. So I'm glad that people are addressing it.

QUEST: And for example, if you take Europe, the inability to have biometric machines that other countries can use in a non-Schengen environment, it's

frustrating. It's annoying, it's bureaucratic. And what annoys me, Glenn, oh, you've started me off now. And we could be here all night on this one.

What annoys me about it is I don't know how the bureaucrats and politicians can feel proud that they're doing a decent job.

FOGEL: Well, I think they're frustrated, too. Don't forget, they travel, too. It ends up priorities. It ends up where's the money going to go. Some

of these things take a long time. And then there's the privacy issue. You know, you mentioned biometrics and I absolutely am in favor of that. I

think it speeds people through, but there are groups unfortunately, it's my opinion, that they actually are stopping us from being able to do things

that are safe, that will preserve privacy and allow us to be more efficient getting through.

Let's face it, nobody goes on holiday because they want to hang out in the airport.

QUEST: No. True. This -- the latest numbers inbound tourists overseas to the United States showing once again a reduction. And we can we can find

any one of 1,000 to one reasons for why. But it is worrying for U.S. tourism that the numbers, they should be growing and they're not.

FOGEL: Yes. It's very disappointing when you look at the numbers and you compare it to 2019. So pre-pandemic, the total number of inbound to the

U.S. is lower than 2019. And that's really disappointing, especially because travel tourism, that's a big part of the economy. Those are a lot

of jobs. And unfortunately that money is being spent. It's just not being spent in the U.S.

QUEST: Right.

FOGEL: We will lose them. That's the problem.

QUEST: So we're at the height of the tourism -- or I should rephrase that. We're at the height of the northern hemisphere tourist summer. Of course, a

company like yourself is well aware of the southern hemispheres at different times. But what trend are you seeing? Can we pull out any trends

so far in this year's tourism numbers?

FOGEL: Well, yes, we talked about it when we did our last earnings call, how there still is a lot of growth in tourism. It's obviously some places a

little slower than others. Asia growing very nicely. Most of Western Europe, Eastern Europe still doing well. It was the U.S. was a little bit

slower, but people like to travel. People always like to travel.

QUEST: Right.

FOGEL: We saw that, as soon as the pandemic ended, people wanted to get going. I really think about this long term. Long-term travel is going to

continue to increase faster than GDP. And that's a great tailwind for our industry.

QUEST: So for your company, how are you going to adapt? For instance, the increase of A.I. I mean, my husband and I this year went on a driving

holiday through Europe. And we deliberately got ChatGPT to set the route. We told them the parameters of the hotels, sort of hotels, did the whole

thing for us. Now you need to integrate all of that into the various products that you are offering.

[16:40:07]

So how do you do it? What does the booking look like, your company look like in five years?

FOGEL: Well, it's not five years. In fact, I'm a little disappointed, Richard, that instead of using ChatGPT, you didn't use our Booking.com A.I.

trip planner, which would have done just the same thing, only I think a little better because we would have been able to book your hotel right off

of that. So you could have used that or at our Priceline company, you could have used a very similar product called -- it's called Penny. Also it's

A.I. driven. It's the exact same thing.

So we are far ahead in many, many different ways that we are already using A.I. and creating a much better experience for travelers.

QUEST: So when you're using your A.I., it has to be agnostic, doesn't it? As to product, because there has to in a sense be neutral as to what it

gives, the best offer for the best product in a sense of the parameters that I've set.

FOGEL: Well, actually, what we really want to do, what we're working on, is make sure it provides the best solution for you. Personalized. Based on

what we know about you, what you've told us, and what you used in our -- with our company before. So using that data we can provide a much better

solution to whatever you are looking for. That's that one to one personalization.

In fact, I really think of it as I want to use A.I. to recreate was the old human travel agent who knew so much about you, knew what you liked, knew

what you could afford, and present to you those type of selections, instead of a lot of stuff that you have no interest in.

QUEST: And I'll try, I promise you, I'll try it and well, you and I will talk about the results. Let's see where you end up sending me.

All right. Good to see you, Glenn. Always good to talk to you. Thank you, sir.

FOGEL: Thank you.

QUEST: And that's our program for tonight. I wonder if I'm going to end up.

I'm Richard Quest in New York. Delighted to have your attention and company tonight. Whatever you're up to in the hours ahead, I hope it's profitable.

"MARKETPLACE EUROPE" is next.

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[16:45:24]

(MARKETPLACE EUROPE)

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