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Quest Means Business
Fed Holds Rates Steady Amid Threats to its Independence; President Trump Says U.S. Dollar Should Seek its Own Level; Officers Involved in Pretti Shooting Put on Administrative Leave; FBI Searches Elections Office in Fulton County, Georgia; Moderna Chairman Says Trump Policy Undermining U.S. Lead in Biotechnology; Amazon Cuts 16,000 Jobs as It Expands A.I. Infrastructure; Meta, Microsoft Report Earnings; Interview with Logitech CEO Hanneke Faber; South Korea Court Sentences Ex-First Lady to Jail for Bribery. Aired 4-5p ET
Aired January 28, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:19]
PAULA NEWTON, CNN INTERNATIONAL HOST: Well, you wouldn't know it was a fed rate decision day. The market was sideways before the announcement. There
you see pretty much trading flat.
Those are the markets, and these are the main events: The Federal Reserve keeps rates steady, defying President Trump's calls for a cut.
Two officers involved in the fatal shooting of Minneapolis resident, Alex Pretti have now been put on administrative leave.
And the World Travel and Tourism Council warns a proposal to make U.S. travelers hand over their social media history puts 150,000 jobs at risk. I
will speak to the CEO.
Live from New York, it is Wednesday, January 28th. I am Paula Newton, in for Richard Quest and this is QUEST MEANS BUSINESS.
And good evening, tonight the Fed has held its ground amid unprecedented White House pressure. The U.S. Central Bank held interest rates steady,
saying unemployment has stabilized and inflation remains elevated. This was the Fed's first meeting since the Justice Department opened a criminal
probe into Chairman Jerome Powell. It could be the last before The White House nominates Powell's successor.
Powell had a consistent response to questions along these lines. Listen.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: I am just not going to -- this is really about the press conference and the economy and what we did
today, but -- and some ancillary, but I am not going to be getting into that.
I have nothing for you on that today.
No, and I really, once again have nothing for you on that today, that either.
(END VIDEO CLIP)
NEWTON: Matt Egan, you were asking questions there as well. You actually got your questions answered.
I mean, what were your overall impressions there? I mean, everyone had politics on the mind, but the Chairman himself was pretty much, look, we
are going to let the data light the way here.
MATT EGAN, CNN SENIOR REPORTER: Yes, and you know, he struck a pretty optimistic tone about the data, Paula. He talked a lot about how growth is
expected to pick up, how consumer spending has been resilient, how there are some early signs the job market might be stabilizing, especially the
unemployment rate and how inflation hasn't been as bad as feared.
And so overall, he sounded pretty upbeat, which helps explain why the Fed decided to pause, why they are defying these demands from the President to
slash interest rates. The Fed has already cut interest rates last year three times in a row, lowering rates to three-year lows, and the fact that
the job market seems to be stabilizing a bit, that takes some of the pressure off from the Fed from feeling like they need to come in and rush
to the rescue.
Now, as you noted during the press conference, Fed Chair Powell, he did not engage with many of the questions about the DOJ's unprecedented
investigation into him and into the Federal Reserve. But he did answer when I asked him what his advice would be to whoever replaces him when his time
as Chair expires in May. Take a listen to his response.
(BEGIN VIDEO CLIP)
POWELL: Yes, honestly, I'd say a couple of things. One is, you know, stay out of elected politics, don't get pulled into elected politics. Don't do
it, that's another thing.
Another is that, you know, our window into democratic accountability is Congress.
(END VIDEO CLIP)
EGAN: Now, he went on to praise the Fed's staff as dedicated to helping the public and highly capable. One other question that Powell did engage on is
why he decided it was important for him to appear in person last week during the high stakes Supreme Court oral arguments over the President's
decision to try to fire sitting Fed Governor Lisa Cook and Powell said, look, it is not unprecedented.
He noted that Paul Volcker did something similar in the 1980s, and Powell said he decided to appear in person because he felt like this is the most
important case or one of the most important cases in the Fed's a hundred- plus year history.
So, look, you put it all together. Powell, he is clearly very protective of Fed independence. He is not caving to all of this pressure to cut interest
rates, and I think the good news for our viewers is that Powell doesn't feel like he needs to come to the rescue, because he is hopeful that the
job market is stabilized.
Back to you.
NEWTON: Matt Egan, thanks very much. Appreciate you being there. And like I said, you did get some answers from him one way or the other. Appreciate
it.
Now, the U.S. dollar snapped a four-day slide, its worst losing streak since April.
[16:05:10]
Its value has lost 2.6 percent on speculation the U.S. might support the Japanese yen.
Now, Secretary of Treasury Scott Bessent was asked this morning about a possible intervention. He told CNBC, absolutely not. That appears to have
calmed the markets for now, especially after this comment yesterday from President Trump.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: I think it is great. I mean, the value of the dollar. Look at the business we are doing.
No, the dollar is doing great.
I want it to just seek its own level, which is the fair thing to do. You could have it -- I could have it go up or go down like a yo-yo.
(END VIDEO CLIP)
NEWTON: We don't want that just for the record.
While a weak dollar can help boost U.S. exports, it is also a signal that investors could be hedging their exposure to the United States.
Patrick Harker is the former president of the Philadelphia Fed, and he joins us now. Really glad to have you on board today, Mr. Harker.
According to Chair Powell, we are going to let the data light the way. Does that mean no interest rate cuts for the foreseeable future now? Because if
you remember, these markets were still anticipating there would be more cuts, perhaps before Chair Powell leaves in May.
PATRICK HARKER, FORMER PRESIDENT OF THE PHILADELPHIA FEDERAL RESERVE: Yes. Thanks for having me.
Foreseeable future is an interesting word because a lot is unforeseen given the uncertainty that the Fed is facing right now. So, my guess is one more
cut is in the cards. The last SEP from the Fed had two. It is somewhere there, one or two. I don't -- but I don't think that's going to happen
until maybe summer.
NEWTON: So, once we have a new Fed Chair.
The currency markets, we have to talk about them, right? They are absolutely trembling. We just saw the yo-yo of this. President Trump said
he is not committed to a strong U.S. dollar. Bessent comes out this morning, contradicts him.
And then you have it seems this somewhat irrational trade in gold and silver where I mean the sky seems to be the limit here. I am wondering what
your takeaway is.
HARKER: The cloud of uncertainty. People are really struggling with the risks they are facing. There is risk on, risk off.
I think at this point, I applaud the Fed for just standing still because given all of this uncertainty, the Fed needs to be the steady arm here, the
steady organization in the economy and that is what I think Chair Powell is trying to project.
NEWTON: And I do want to get to the issue of staying steady on those things despite the politics, but I also want to ask you about the bond market. I
am wondering if it worries you.
I mean, most people have been talking about worries about A.I., the dollar trade, unemployment, and yet I happen to think that fiscal policy, not just
in the United States, could be the real risk. Am I wrong?
HARKER: Yes. No, no. That is the medium to long-term risk. We will be fine today, we will be fine tomorrow, but we have to deal with this fiscal
issue. And this is what you're seeing the market reflecting. The long end is not coming down. Why would it come down? We are issuing a lot of debt
and people aren't clamoring for our debt.
So, I think in that case, you're not going to see bond prices go up substantially and as a result, you're going to see rates, long rates stay
higher.
NEWTON: And that means very high mortgage rates still, at least for the U.S. public. But do you think there is a broader risk there that this
really could end up being a shock to the market, especially if, you know, sometimes some countries might have trouble selling those bonds?
HARKER: Yes. That's exactly it, and you don't know when it is coming exactly, right? It hits you very quickly and the bond vigilantes come out
and they express their opinion through trades.
So, I think at this point we should get serious about dealing with the fiscal issues we face in the U.S., and more broadly, globally.
NEWTON: Mr. Harker, how did he get anybody's attention? It doesn't matter which country you go to right now. I mean, it doesn't seem like anyone is
listening, not just in the United States.
HARKER: Right. No party is talking about it right now, but I think it is incumbent upon us, the former Fed people, when you're in the Fed, you don't
talk about fiscal policy. I am out as of June, and now I can say loudly, we need to deal with this issue and there are solutions to this issue.
My colleagues here at Wharton at the Penn Wharton Budget Model have practical solutions to deal with the deficit. What we lack is the political
will to deal with it. I think what the forcing function is going to be is that the Social Security Trust Fund here in the United States will run dry
in about seven years. We are going to have to deal with it before then.
NEWTON: Seven years. It is quite a tipping point.
Mr. Harker, can you take us around that table, though, with the Fed? So the Fed Chair was categorical. He believes the Fed will remain independent. I
note that in today's decision, it was a Trump appointee, Mr. Miran and somebody, Mr. Waller who is up -- one of the candidates up to be the next
Fed Chair who dissented.
HARKER: Right.
NEWTON: Are you as confident as Mr. Powell is on the Fed remaining independent through all of this?
[16:10:10]
HARKER: I am, because my interaction with members of Congress, particularly members of the Senate, they have reflected the strong desire for the Fed to
stay independent in monetary policy. The Fed is not independent in everything when it comes to regulation, supervision. There is oversight
always from Congress.
It is specifically the independence of the monetary policy decision that is critical and we know this. There is no example of where the wall between
the political leadership and monetary policy has been breached. And its turned out well, that happened in the 70s with us, it has happened around
the world today. It never turns out well.
NEWTON: And I will say many people continue to have confidence in the four candidates that are up now. They do believe those people will continue to
have that Fed policy. You would agree?
HARKER: Yes, I would agree.
NEWTON: Got you. Patrick Harker, great to have you on the day that we do have the Fed decision and unfortunately, so much of the politics seeping
into this as well.
Patrick Harker for us appreciate it.
HARKER: Take care.
NEWTON: Now, tonight U.S. authorities are weighing possible federal charges in Tuesday's brazen attack on U.S. Congresswoman Ilhan Omar. A man sprayed
her with a liquid substance.
Now, a source tells CNN, police believe it was just apple cider vinegar and the U.S. Federal officers involved in the fatal shooting of Alex Pretti in
Minneapolis have now been put on administrative leave. That is according to a Department of Homeland Security official.
Priscilla Alvarez joins me now.
There are new developments in this. I am just wondering, though, what you're seeing on the ground there, Priscilla. We've talked about the moves,
right? The fact that the Trump administration has signaled they want a different tone in Minneapolis, but it has really changed things on the
ground.
PRISCILLA ALVAREZ, CNN WHITE HOUSE CORRESPONDENT: Well, and the President himself has said that he wanted to "de-escalate a little bit" yesterday.
Now, as for what this means, recall that President Trump had dispatched his White House Border Czar, Tom Homan to Minneapolis, sidelining Gregory
Bovino, who was the top Border Patrol official who had been leading the command in this immigration crackdown in the interior of the United States.
So, since Tom Homan has been on the ground, sources tell us he has been in back-to-back meetings with local officials and with federal officials as
they try to sort out what the path forward here is, insofar as the President continuing to pursue his immigration agenda, but also taking into
account the chaos that has unfolded in the city over the last several weeks.
Now, one U.S. official has described these talks as, "precarious" and that they are trying to work on a plan. One of the discussions includes, for
example, putting a sharper focus on targeted operations. That means identifying those undocumented immigrants with criminal records that they
would move forward to arrest, and having U.S. Border Patrol serve in a support mission for Immigration and Customs Enforcement, all of this would
be different, look different than those broad sweeps that have been happening in the city.
One U.S. official, however, saying, "... discussions are still very much fluid and no final plan has been signed off on by The White House." Now, in
addition to all of this is the sheer number of agents. There were 3,000 federal agents who were deployed to Minnesota over the last two months, and
they are expected to taper off over time again as the administration tries to assess what its strategy is in that city.
Now, again, coming back to the President, we have noticed that his tone has shifted slightly when it comes to the city. He still wants, however, or at
least conveys that he still wants the immigration enforcement to continue, but what that looks like practically is part of the conversations that Tom
Homan is having right now.
So, we don't have a good sense as to practically what it is going to look like on the ground, but we know where conversations are so far, which
indicate more of that conventional ICE approach than those broader immigration sweeps that we have been seeing over the last year.
NEWTON: And, Priscilla, can the American public really count on real change here? I mean, I note that, for instance, the Haitian community, their
Temporary Protected Status will likely end unless the courts intervene next week. So, they are wondering, is this going to still be replicated in other
communities? Or when we talk about a de-escalation, does that mean that tactics will change all over the country?
ALVAREZ: Well, you're talking about two things there, right? There is the policy, which is the Temporary Protected Status, and then there is the
operations. Now, one affects the other because if the policy is to strip people of their temporary protections here, then they could fall and be
swept up in those operations.
But there is no suggestion in my conversations that there is going to be change in the immigration policy and the way that they are handling
immigrant populations in the United States and the way that they are retracting Temporary Protected Status for some nationalities or tightening
asylum or tightening the refugee admission process.
[16:15:02]
But the question here is, what do operations look like? Because what we have seen in polling is that the American public is still on board with the
President's mass deportation campaign. They believe that undocumented immigrants, particularly those with criminal records, should be deported.
But it comes down to the how it is done.
So again, there are tracks here, and certainly one influences the other, but in terms of the policy and what it means for those temporary
protections for various nationalities in the United States, there hasn't been any indication that that is going to be changing -- Paula.
NEWTON: Yes, Priscilla, I am so glad you gave us that context, because it can be kind of confusing, but in terms of what is coming in the next few
weeks, like you said, many Americans still support the fact that these deportations will continue.
Priscilla Alvarez for us, appreciate it.
Now, a programing note from us. Anderson Cooper and Sara Sidner will host a CNN town hall in Minneapolis tonight. Officials, local leaders in
Minneapolis, Mayor Jacob Frey will take questions from Minnesotans and discuss a path forward. "State of Emergency: Confronting the Crisis in
Minnesota" will air live on CNN at 8:00 P.M. Eastern four hours from now, and it will stream on the CNN app.
Germany's foreign office has issued a travel advisory for its citizens traveling to the United States. It specifically highlights Minneapolis and
the possibility of violent clashes with authorities. It urges Germans to avoid crowds where violence might break out. France released similar
guidance for its citizens last week.
Now I will speak with the head of the World Travel and Tourism Council ahead, as well as we will have their new report warning that new rules
requiring visitors to hand over their social media history could cost the U.S. tourism industry more than $15 billion in lost revenue.
We will have that next.
(COMMERCIAL BREAK)
NEWTON: The World Travel and Tourism Council says a controversial new proposal could cost the U.S. more than a hundred thousand jobs.
Customs and Border Protection has proposed that visa waiver applicants be required to provide their recent social media as part of the process. The
Council surveyed international travelers, 34 percent of them said that policy would discourage them from coming to the United States. It puts the
corresponding economic loss at billions of dollars and possibly 150,000 jobs.
The WTTC CEO, Gloria Guevara joins us now, and glad to have you with us, because this has been the talk on both sides of the Atlantic and beyond
into Asia.
Do you have any indication that the Trump administration is listening to the facts and the fears that are coming from the tourism industry?
[16:20:08]
GLORIA GUEVARA, CEO, WORLD TRAVEL AND TOURISM COUNCIL: We do. As we know, travel and tourism is very important for the U.S. The U.S. is the largest
economy in travel and tourism in the world. They are very concerned about jobs and of course they want to retain that competitive advantage. We
understand that this policy will put the U.S. in a very competitive disadvantage.
And as you mentioned, according to the research, that we have done, 157,000 jobs can be lost. That's an average of three months of new jobs that the
Jobs Report has been reporting, and that's a huge impact because these are small and medium enterprises. This is, of course, jobs in our sector and
$15.7 billion can be lost.
Now, we believe the administration cares about jobs, cares about the importance of the economy and asking for social media to ask the travelers
that would create a lot of issues and will discourage travelers to go to the U.S.
NEWTON: You say that they understand the impact this will have though, but do you see them changing this policy? And i think a lot of people are
wondering, operationally, what does this look like? Can they possibly check every phone?
GUEVARA: It is going to be very complicated. We don't believe that this policy is a good policy. We understand that security is a top priority, but
there are other ways to check passengers and travelers that travel to the U.S.
We also need to understand that ESTA travelers, the travelers that they are targeting are travelers from Europe, from Japan, from Korea, from Australia
and those travelers usually are lower risk travelers. So, there are several factors that they have to consider, but we believe that if they look at the
data and the job losses for Americans, because these are Americans that are going to be impacted, 157,000 might be impacted, I think this is
significant, and that's why we are sharing our research. We are sharing what we have done and hopefully the policymakers, especially the decision
makers, they will decide not to implement this policy that will impact the economy in the U.S.
NEWTON: We have seen certain sectors of the economy, the tourism economy in the United States specifically affected. I mean, I will just point to one,
Las Vegas, that has been losing a lot of business there. How vulnerable are those markets? And what are you seeing in terms of a trip that most people
didn't ever consider not taking? Right?
People went to Vegas, they went to take in the shows, went to do a little gambling, have some food, and yet from Las Vegas, they are reporting
significant declines in traffic.
GUEVARA: Unfortunately, last year was the best year for travel and tourism globally in every single country because we measure 185 countries around
the world. Every single country, we saw an increase in international spend. Unfortunately, that was not the case for the U.S.
We are seeing a decrease of $19 billion, and why is that? Because we are seeing a decrease, for instance, of travelers coming from Canada, from
Europe and from some markets. However, domestic is doing good, domestic is growing and domestic is very important for the U.S. economy.
But again, the spend from international travelers is significant. In the case of Las Vegas that you mentioned, 15 or 20 percent of their income is
from international travelers and domestic also is important, but we need to be careful here because if we continue with this trajectory where we see no
growth in travel and tourism in several years, unfortunately the U.S. is going to be not number one, but number two globally in our sector.
So, we are concerned, we are worried. But of course, we know also that with the right policies in place and the right promotion and the right support,
we can recover and be again in a competitive position.
NEWTON: If the Trump administration does not change this policy. What is your advice to travelers who need to have the ESTA requirements and have to
submit their social media accounts?
GUEVARA: Well, based on our data, more than 34 percent of travelers will not come to the U.S. if they have to submit this because they feel that
this is something that they feel is intrusive, that is, they are not comfortable and they will go to other places around the world.
There are so many places to travel and so many places to visit. So, what i can tell you is that the ESTA travelers will choose another destination for
their international leisure travel. So, what we see is, despite the promotion and despite of all the wonderful experiences and the great
products that we find in the U.S., if we don't have the right policies in place, if we don't make it seamless, nice and easy to travel to the U.S.,
we are going to see a decline. And again, the decline is translated to jobs.
Let's remember that globally, one of every three new jobs in the world in the last four years were created thanks to travel and tourism. One of every
three new jobs.
[16:25:10]
That's very important and the administration, I know that they care about new jobs and they care about American jobs and travel and tourism provides
exactly that. We create American jobs, U.S., so it is very important to welcome international travelers, also domestic, but bring those
international travelers that are spending a lot of money in Europe, Asia, Middle East, and they can come to the U.S.
NEWTON: Yes, and we will see if people in the administration will listen to the problems with this new policy.
Gloria Guevara, for us, really appreciate your insights.
Now coming up for us, the FBI searches an elections office in Georgia, what it may have to do with the 2020 U.S. presidential election that Donald
Trump continues to claim was stolen from him.
(COMMERCIAL BREAK)
NEWTON: Hello, I am Paula Newton, and there is more QUEST MEANS BUSINESS in a moment when we will tell you why Amazon is cutting about 16,000 jobs as
part of a pivot towards A.I. and Meta and Microsoft just released earnings. We will take you through the numbers.
Before that though, this is the headlines this hour.
A U.S. official confirms to CNN that the federal agents involved in the shooting death of Alex Pretti have been placed on administrative leave.
Homeland Security Department report says that two officers fired their guns during that fatal encounter in Minneapolis.
U.S. Secretary of State Marco Rubio says the Trump administration would like to see regime change in Cuba. He made the comment at a hearing before
the Senate Foreign Relations Committee. This was his first public testimony about the U.S. operation in Venezuela.
He said that the country's leaders are moving towards closer ties with the United States.
The Federal Reserve decided to keep interest rates steady today, resisting pressure from President Trump about another rate cut. The U.S. Central Bank
said economic activity has been expanding at a solid pace, while the unemployment rate shows signs of stabilization.
[16:30:10]
A new twist in President Trump's ongoing and unproven claim that the 2020 election was stolen from him. The FBI says it carried out a search warrant
at an elections office near Atlanta, Georgia. The bureau tells CNN that its investigation is ongoing. During President Trump's first term, the Justice
Department failed to find any evidence supporting his claims of widespread fraud.
Paula Reid joins us now with more on this.
Paula, can you let us in on what the significance of this might be, especially as it relates to voter rolls, right? Actually getting that nuts
and bolts information on who's registered to vote in Georgia.
PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: That's exactly right. Because a source tells CNN that the focus of this search warrant, the
purpose of this search is to seize election records and pursue these allegations, these baseless allegations that the 2020 election was stolen.
And it's significant that this is playing out in Fulton County for two reasons. One, the Metro Atlanta area has been a centerpiece of President
Trump's baseless allegations about the 2020 election.
And we also know that he has a legal history there in 2023. That county charged him and 18 others with trying to overturn the results of the 2020
election. So he has a lengthy legal history in that case. I will note that while some folks charged in that case took plea deals, the case was
ultimately dismissed after it had to be taken away from the Fulton County district attorney because she had a personal relationship with the lawyer
overseeing that case.
So this is a county that the Trump folks talk about a lot. There's no love lost between the president and this county for many reasons. But here
specifically, it is notable that his Justice Department is back to search for these records because under the first administration, they looked at
this. Attorney -- then Attorney General Bill Barr looked at these allegations and did not find enough evidence to pursue an investigation.
So as this all resurfaces, there are questions about whether the Justice Department has found new evidence or something new has surfaced to prompt
them to pursue an investigation, or whether the Justice Department is once again being used to pursue one of the president's pet issues.
NEWTON: Yes, I think at issue here is the politics of it. The president did indicate earlier that there was no final word on this, and that, in his
words, they'd be looking into this 2020 election and specifically Georgia's role in it. But politics is playing a role here in Georgia.
REID: Yes, absolutely. I mean, this has been, this county in particular, this has been something that the president has been focused on since 2020,
but it really is important to ask the question right now. Did something new surface to make them pursue an investigation? Because if the same
president-select an attorney general, looked at the evidence and didn't pursue anything, why are they pursuing it now?
And that's something we just don't know. We're continuing to report out what prompted this search and what, if any, evidence they gathered during
the search.
NEWTON: Paula Reid, for us, really appreciate the update. Thanks so much.
Now, the Trump administration has reshaped U.S. policy toward scientific research and health care. It's a concern for the chairman of Moderna. Now
in Davos last week, Noubar Afeyan told Richard Quest that it's affecting America's position in biotechnology.
(BEGIN VIDEOTAPE)
NOUBAR AFEYAN, CHAIRMAN, MODERNA: That whole industry is based on a scientific output, that there's a whole process by which people generate
data, debate it, and agree on what the current view of the truth is. And then you make decisions based on that. That's driven policy, that's driven
all the investment decisions.
We're living in a time when science is being debated by opinions, and that has not really been precedented for a very long time. And what that does is
it undermines confidence in the output.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Those people who are doing that debating say the opposite. They say, no, you have accepted the truth of
certain statements unquestioningly for too long. And let's take for example the number of vaccines for children. The rest of the world doesn't give
that many. Why should the, et cetera, et cetera?
AFEYAN: I don't think policy in the U.S. has been without massive scientific debate. There is no equivalent debate today. There's no
equivalent facts that are being put forward. There are opinions and assertions, and if you don't have to match facts with facts, at least a
comparable volume of it, then it's really hard to figure out what the truth is.
QUEST: Right. Then what's the danger of all of this, though, as it plays out?
AFEYAN: I think it undermines a huge lead that the U.S. has in the biotechnology industry to invent the new medicines, the new vaccines. The
world, as we saw it during the pandemic, depended on U.S. technology in the form of MRNA and many other things that helped the solution be found. And
the question is the next pandemic and the next set of challenges we have, can we count on a vibrant industry that takes federally funded research
from academia and converts it into valuable, impactful products? I don't think we can make that assumption any longer.
[16:35:05]
QUEST: Are you the canary in the mine, in a sense, warning us about, you know, we're all sort of looking at the individual issue of today, but
you're basically saying what's actually happening is the infrastructure, the capacity is being denuded.
AFEYAN: That's right. The foundation of this industry is being able to debate with facts against facts and come up with what to do next. And I
think that is being hurt. And by the way, I'll say one more thing. Right now it may be about childhood vaccines. It used to be about MRNA. It may be
about all vaccines. It may be about sources of various diseases. But it will not stop there. I think the only part of the canary that I'm saying is
if you undermine the output of scientific method, you're basically questioning cancer treatments, metabolic disease treatments, on and on.
And if a patient sits in front of a doctor and says, look, I heard that the chemotherapy you're about to give me for my cancer doesn't work and wasn't
based on good science, where do we go from there? What is the doctor going to say? You figure it out?
QUEST: If we look now at the pharmaceutical industry and the increase in Chinese penetration into the rest of the world, you see this as continuing.
AFEYAN: I see this as continuing. I see them as doubling down on the very thing that caused the U.S. to have a lead, which was basically funding
science and trusting the output of science to advance and to make their investment decisions. The government is pushing it very hard at the very
time that we're questioning it here. And so the juxtaposition is creating a massive economic disadvantage in this country.
What happens is eventually you end up creating a situation where there will be in China completely competent, large scale pharmaceutical suppliers. And
are we really, as a society, going to say that we will outsource our new medicines, not just the low cost generic, but our new medicines to an
entirely different system? And I think that's an economic security issue. I think, frankly, it's an overall security issue. And I think that Washington
has to take this into account as opposed to making these increasingly kind of non-foundational decisions based on facts.
QUEST: Right. What gives you hope? In a world of great difficulty at the moment.
AFEYAN: All right. Let's see human adaptability.
QUEST: Oh, that's good.
AFEYAN: That's all we got to go on in my view.
QUEST: You managed to spell.
AFEYAN: I better know how to spell adaptation.
(END VIDEOTAPE)
NEWTON: OK, Amazon is cutting 16,000 employees despite Melania Trump claiming their new documentary would create more job opportunities. We'll
have that after this.
(COMMERCIAL BREAK)
[16:40:21]
NEWTON: That is First Lady Melania Trump ringing today's Opening Bell at the New York Stock Exchange. She's promoting her new documentary out in
theaters this week. Now the film was produced by Amazon-MGM Studios and it details her return to the White House. Both she and her husband have
described it as a driver of job growth.
Amazon, though, meanwhile is cutting 16,000, says the restructuring comes amid a pivot towards A.I. This is Amazon's second major round of layoffs in
three months.
Our Anna Cooban is with us from London.
You know, I'm having trouble parsing these statements from Amazon, because on the one hand this might a pivot towards A.I., on the other hand they're
seeing that these, you know, that these layoffs are essentially right- sizing, that they haven't really seen the benefits of A.I. yet in terms of, you know, productivity and growth. Which is it?
ANNA COOBAN, CNN BUSINESS AND ECONOMICS CORRESPONDENT: Well, the statement didn't give much away, Paula. It didn't really say exactly why it's making
these cuts. But I think the fact that you have the 16,000 jobs coming off, those 14,000 a matter of weeks ago is enough to get anybody to ask, you
know, the extent to which this is as a result of these enormous investments that Amazon is making into A.I. like many other tech companies.
$125 billion was it was saying around October last year it was going to put into capital expenditure. A lot of that being these A.I. data centers or
infrastructure. And straight from the horse's mouth, Paula, last year Andy Jassy, the CEO of Amazon, said in a pretty infamous blog pot now, that the
rolling out of A.I. agents was going to mean fewer people doing some of the jobs that are being done today and more people doing other types of jobs.
So we don't know exactly why these layoffs are happening but it's all occurring within that broader context, Paula, and many people are saying,
is the elephant in the room A.I. here?
NEWTON: In terms of Amazon, though, one thing, and this does not affect the warehouse workers, but we're also talking about A.I. and then robotics as
well. Should we look at Amazon as a leading indicator here of where these job cuts will be going? Because they continue to tell us that this is going
to be incredibly transformative and not a good thing for job growth in the next five years.
COOBAN: Yes. Well, Amazon is sort of a vanguard in this area. You know, hired lots of people during the pandemic. It's got this massive internet
business, it's rolling out A.I. agents across many of its services and using robotics in its warehouses. So it's a multifaceted business. And you
can then look at those parts of the business and ask, to what extent is A.I. being implemented in these parts?
But in terms of the fear around job losses as a result of A.I., Paula, we do have this report that came out recently by Vanguard and asset management
company, and this does perhaps pour cold water on some of the fears, at least in the short term. It said that A.I., white-collar jobs that are
particularly exposed to having the tasks within those jobs automated, they've actually grown at a faster pace recently than they did prior to the
pandemic.
So analysts are saying that, yes, A.I. is a transformative technology. It is coming for our jobs. But maybe right not in the immediate future, Paula.
NEWTON: And then we have the Melania documentary that will be in theaters first, but I'm assuming afterwards will be on Amazon Prime.
COOBAN: Yes. Well, this documentary, I think a lot of money has gone into making it. I think a lot of people are excited to see what, you know, peek
behind the curtain at the White House and see the perspective of Melania, somebody that, until this point, really hasn't given much away, Paula. I
think a lot of people will be interested.
NEWTON: Yes. And it'll be interesting in terms of the money that has been spent as well. And we're showing there just all the executives that showed
up for the screening of that documentary at the White House last week.
Anna Cooban for us from London. Thanks so much.
Now, Logitech posted its best quarter since the pandemic. Its shares still took a hit today, though. I'll ask the CEO about industry concerns and how
her company plans to stay relevant in the era of A.I.
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[16:46:51]
NEWTON: All right, we've got some earnings news for you. In the last few minutes tech giants Meta and Microsoft have announced quarterly results.
Both beat expectations on overall earnings and revenue. Meta shares soared after hours while Microsoft fell. Despite those results, CNN business tech
editor Lisa Eadicicco has been delving into all of this.
Now let's start with Microsoft, because yes, it's not looking good. The stock has been taking a beating and it certainly didn't meet -- even though
it met expectations on top and bottom, it didn't seem to impress investors.
LISA EADICICCO, CNN BUSINESS TECH EDITOR: So I think what we're seeing here broadly across both Microsoft and Meta is this kind of story line that
we've been seeing unfold over the past year of these companies really investing heavily in A.I. and then having to live up to this pressure to
show how that's really translating to their core businesses.
And for Microsoft, even though it was a strong quarter, the number that we really want to be looking at here is Cloud growth and Azure growth. And
while that business unit did grow, Azure saw 39 percent growth this past quarter. There was slightly higher growth in the previous quarter of 40
percent. So it is possible that Wall Street was perhaps looking for a little bit more growth in that segment.
Because the reason why this is so critical to Microsoft is because it really underscores the role that Microsoft plays in this A.I. boom as an
infrastructure player, as being part of the enabling technology that makes these A.I. services and A.I. apps and A.I. models work. So I think that's
one standout number with Microsoft, for sure.
NEWTON: And yet Meta has had quite a lot of stops and starts as well. And yet, as we see here in after hours, the stock is up about 10 percent.
EADICICCO: I think one thing that investors are likely happy about is the outlook that Meta gave for the upcoming quarter. And I think, once again, a
big thing that Meta is going to have to face on this earnings call that's happening is questions about what this really means for its core
businesses, though, because Meta, even though it's investing heavily in A.I., especially in infrastructure and talent, most of its revenue still
comes from a family of apps and advertising.
So I think investors are going to be looking for questions about how these talent investments, these infrastructure investments, you know, Meta just
said that it invested even more in capital expenditures this past quarter, how that really translates to the core products that are driving its
business? But I do think that outlook probably gave some investors faith that maybe they're on the right track. But we'll have to hear more from
Mark Zuckerberg and other executives that will be speaking on the earnings call about this.
NEWTON: Yes, it will be interesting to listen to them, especially about future guidance. And you are correct, the spending by Meta on A.I. has been
absolutely eye-watering.
Lisa, thanks so much. Appreciate it.
Now shares of Logitech closed sharply lower despite the company's strongest earnings since the pandemic. They slid more than 7 percent, even though
Logitech reported strong sales of its keyboards, headsets and other computer peripherals. Investors are worried about costs and future demand.
Logitech says A.I. is fueling demand for its products as people look for accessories to try and work with those all-important A.I. tools.
Logitech CEO Hanneke Faber is with us now.
Good to see you. Thanks so much. Especially as we try and parse exactly what effect A.I. is going to have on so many companies. I got to say,
right, Hanukkah, it's a rough crowd out there.
[16:50:01]
There is no pleasing them, but it definitely shows hesitancy about companies like yours and where they are headed in this uncertain A.I.
environment to come. I mean, what do you say to them about that?
HANNEKE FABER, CEO, LOGITECH: Yes, definitely a lot of volatility in the share price. And we don't obsess about that daily share price because
there's so much volatility. What we obsess about is the performance of the business. And we're super proud of this quarter. Operating income at record
levels X the pandemic peak. Our eighth quarter of top line growth, 6 percent growth in dollars, 4 percent in constant currency.
And also a record cash quarter. This is a real business that converts operating income to cash. In fact, one and a half times. So a really good
quarter. And we intend to continue to deliver those great quarters. This is a company for all seasons, and A.I. is a tailwind for us going forward.
NEWTON: You say it's a tailwind, but there is some hesitancy. Now your company's pedigree suggests you could be a great connection point between
users and A.I. and yet I feel like your company still hasn't articulated enough what those products could look like, what the opportunities are
there, and whether or not you're being very aggressive about that.
FABER: Yes. So in our products, I think what makes us a little different from many others is that we are well beyond the phase of cute experiments
or proofs of concepts. We are shipping A.I. enabled products around the world at scale. So those are our video and audio products. So if you look
at a site video conferencing camera, if you look at our zone two wireless headsets with two-way noise cancellation, machine learning and A.I.
enabled, if you look at the spot sensor, which is a sensor that enables A.I., all of those are shipping globally and at scale and are driving some
of the good results that you see.
And just last week, we announced a new set of A.I. cameras for video rooms, for video conferencing, for large rooms, auditoriums, boardrooms, et
cetera. So we're well beyond the phase of trying things. We're shipping things at scale. And again, we believe that's definitely part of our growth
trajectory going forward.
NEWTON: And in terms of that growth, what products are you excited about that you see coming online in the next year?
FABER: Yes. So what was driving the growth in the fourth quarter were a few exciting new products. The A.I. enabled video conferencing, video
conferencing was up 8 percent in net sales, but also, of course, on our core business, the MX Master Four, which is the new generation of our
flagship mouse, $120 premium mouse that is off to the best start of any personal workspace product we've ever launched.
NEWTON: So I didn't we'd have mice anymore.
FABER: Super cool.
NEWTON: No mouse, right? What are we thinking here? You think it still has a future then?
FABER: Absolutely. Working without a mouse, if you're -- you know, if you're an advanced user, a software engineer, a finance bro, you are going
to be 30 percent slower and less accurate and less productive without a mouse. So mice are really key. Mice are also ergonomic. If your hand or
your arm hurts at all, that's probably because you're only using a trackpad. So we saw 9 percent growth in mice for the quarter, and I think
that's just testament to the, you know, the great trajectory that that business is on, thanks to innovation.
NEWTON: Now, in terms of weathering some of the more macroeconomic issues here, whether it's the U.S. dollar or other currency changes, tariffs have
been a huge one. It's quite a dynamic time. Can you give us a little look see into what is preoccupying you at the moment? I mean is it still
tariffs?
FABER: So tariffs obviously for us as a very global business with about 30 percent of our business here in the U.S. is something we had to face. But
again we, our team has done a great job offsetting those through cost reductions and through some targeted pricing here in the United States. We
delivered record gross -- record operating income margins and really good gross margins in the third quarter. So tariffs, I would say, you know,
we've weathered the storm really well.
In terms of the dollar, the dollar weakening is actually a tailwind because we have such a global business. 70 percent of our business is outside of
the United States. And that business becomes a bit more valuable. We report in dollars and that helps our bottom line.
NEWTON: But in terms of the tariffs then to come, it still remains a very unpredictable scenario.
FABER: It is, but we are set up really for any scenario. So what we did in the last year and we committed that in April is that for U.S. bound
products 40 percent of our U.S. bound products came from China. Back last April, we committed to reducing that to 10 percent by the end of the
calendar year. We achieved that by December. Less than 10 percent of U.S. products were coming from China.
[16:55:03]
And we now have a footprint that is China plus five. So we manufacture in six countries around the world. That gives us a lot of flexibility for
whatever might be thrown our way.
NEWTON: Also sounds like an incredibly complicated company to run.
Hanneke Faber, thanks so much. We appreciate you being with us.
FABER: Thank you so much.
NEWTON: Now a court has sentenced South Korea's former first lady to 20 months in jail. Kim Kyung Hee was found guilty of accepting bribes in the
controversial Unification Church in exchange for political favors. Now she denies any wrongdoing and will appear -- appeal, pardon mem, her case to a
higher court.
CNN's Kristie Lu Stout has more now.
(BEGIN VIDEOTAPE)
KRISTIE LU STOUT, CNN CORRESPONDENT: A love of luxury has brought down a former first lady. In South Korea a court has sentenced Kim Keon Hee, the
wife of former disgraced President Yoon Suk Yeol, to 20 months in prison. She was found guilty of accepting bribes. These are bribes from the
Unification Church that include a Chanel bag and a graft diamond necklace. Kim was found not guilty on additional charges of stock manipulation and
election meddling.
And this follows the investigation into her husband's brief imposition of martial law in 2024, an incident that sent shockwaves through the country,
and he faces separate trials, including a possible death sentence.
Now, during the last year, we have learned more about the former first lady. Kim is a stylish, wealthy businesswoman who was seen as this key
driving force behind her husband's political ascent, and she was not a traditional first lady. Now Kim had an established career in organizing art
exhibitions, you know, appearing comfortable in the spotlight. She even had her own fan club, and she was also an avid promoter of K-culture, a vocal
critic of the dog meat trade and a glamorous fashionista on these overseas trips, she would take with her husband, ex-President Yoon.
Now, Kim has also been the subject of a number of other high profile scandals, including one involving a grayish blue Lady Dior pouch that was
gifted to her by a Korean American pastor. Now, she had also apologized for resume padding and faced allegations for academic plagiarism.
Now as for today's court decision, Kim has denied any wrongdoing.
Kristie Lu Stout, CNN, Hong Kong.
(END VIDEOTAPE)
NEWTON: So U.S. markets closed mostly flat after the Fed held rates steady as expected. The Dow ended up a mere 12 points. Let's have a look at those
Dow components now. Nvidia was up 1.5 percent after the U.S. and Taiwan vowed further cooperation in A.I. and chip production. UnitedHealth Group
is up 4 percent. Now that was after clawing back some of yesterday's heavy losses, and that was related to changes in Medicare spending.
And that's QUEST MEANS BUSINESS. I'm Paula Newton. "THE LEAD WITH JAKE TAPPER" is next.
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