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Quest Means Business
Judge Strikes Down Subpoenas Into Fed Chair Powell; New Numbers Suggest U.S. Economy Was Fragile Before The War; Trump: War Will Be Over When "I Feel It In My Bones;" United States Military: All Crew Members Killed In Refueling Plane Crash; Disruption To Fertilizer Shipments Could Raise Food Prices; E.U. Industrial Production Contracts In January. Aired 4-5p ET
Aired March 13, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:23]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": There is the bell ringing on Wall Street. We have a very busy hour ahead for you. The
markets, International Dermatologists, they are ringing the bell, down 115 just off the lows of the day, but it had been positive.
We've got a strong gavel. The markets are over. We've got so much to get to. Those are the markets and the main events.
In the last hour or so, a judge has quashed the U.S. Justice Department's subpoena against the Fed Chair Jerome Powell, the U.S. Attorney, Jeanine
Pirro, says the decision will be appealed and is blaming activist judges.
President Trump says he will know it in his bones when it is time to end the Iran War. Oil is hovering at $100.00 a barrel and the conflict, which
is highly disruptive to global shipping, the Flexport chief executive will be with us tonight to give it some perspective.
We are live in New York. It is Friday, March the 13th. Be careful. Friday, March the 13th. I am Richard Quest, I mean business.
Breaking news to bring to you, a federal judge has just struck down the subpoenas against the Federal Reserve Chair Jerome Powell.
Judge James Boasberg has written a mountain of evidence suggests the government served these subpoenas to pressure Powell into voting for lower
interest rates or resigning.
He says the government produced essentially zero evidence to suspect Powell of a crime, therefore, in the words of the law, these subpoenas were for an
improper purpose and they could be quashed.
The U.S. Attorney Jeanine Pirro, was defiant after calling the judge "activist."
(BEGIN VIDEO CLIP)
JEANINE PIRRO, WASHINGTON D.C. U.S. ATTORNEY: By inserting himself and preventing the grand jury from even obtaining, let alone hearing evidence.
He has neutered the grand jury's ability to investigate crime.
As a result, Jerome Powell today is now bathed in immunity preventing my office from investigating the Federal Reserve.
(END VIDEO CLIP)
QUEST: Phil Mattingly is in Washington. One will say one thing about Jeanine Pirro. She does know the law. Former D.A., former judge in her own
right. So she knows what she is talking about, but she does come at it from a particular jurisprudential view pro-Trump, pro-administration, obviously
now.
Now, to the bid itself. The reality is -- never mind, there was no evidence and the judge said, that's it! We are not having this nonsense.
PHIL MATTINGLY, CNN CHIEF U.S. DOMESTIC CORRESPONDENT: Yes, and I think this is something, Richard, as two people who have followed this entire
process, the judges conclusions, in his opinion which were not subtle in any way, shape or form and you've already showed some of them align with
what most of us knew who were covering this for a large period of time.
In fact, the Fed Has an entire web page full of all of the documentation of the cost overruns, the overruns are real. The rationale or the kind of
reason why those overruns have occurred over the course of the construction process, are all detailed and documented not just on the Fed website but
have also been turned over in full documentation to the Senate Banking Committee, which the U.S. Attorney referenced several times here.
I think the reality right now is for all of the kind of aggression and intensity that you heard from the U.S. Attorney, Jeanine Pirro, for The
White House, that press conference, while they may have enjoyed the tone, tenor and attacks on a judge that the administration has gone after many
times prior, as in their words or in their view, an advocate, it creates very real problems for a much more important element of this entire back
and forth, which is the future of the President's pick to be the person who follows Jerome Powell.
Kevin Warsh right now is being held up explicitly by one Republican senator who has made very clear until this investigation, which he believes has no
merit is dropped entirely, and until that is announced publicly, he will not allow Warsh to get through the Senate Banking Committee. They had an
opportunity today to put this to bed and clear the path for Kevin Warsh to confirmation. They chose the opposite route, or Jeanine Pirro chose the
opposite route.
QUEST: So, I am glad you mentioned that. I hadn't thought about that. I was focusing on poor Jerome Powell.
[16:05:00]
But you're right, as long as he -- they are appealing, then that senator is not going to release the hold that will allow Warsh to go before the
various committees.
Is it this scorched earth policy that they insist on taking? At what point does it cease to serve their purpose?
MATTINGLY: You're at it right now. I think honestly, the first time -- this whole kind of process over the course of the last couple of months has been
absolutely fascinating to observe, but also to report on because behind- the-scenes, what I picked up from White House officials, from Treasury Department officials in the immediate aftermath of that extraordinary two-
minute straight to camera statement that Jerome Powell delivered on a Sunday night right before Asian markets opened was the first time I have
seen them so on their heels, so panicked and anxious about what was coming next.
Because their efforts up to that point to kind of, as you rightly put them, to be so aggressive to take this strategy to the absolute utmost end have
not really backfired on them. This time, it did, very clearly and not only is it problematic because Powell called them out on it, hasn't moved, has
the support of his board, has the support of international financial figures and Wall Street as well, and on Capitol Hill.
But also because of what comes next, they were so close to Powell leaving on his own volition and getting their own person at the Fed and right now,
that remains very much in limbo.
Phil, I am grateful.
Thank you for coming up so promptly and talking to us quickly on this.
Our senior legal analyst, Elie Honig, is also with me. We've just done the politics and the economics. Now, let's do the law.
On this question that -- does the judge, sorry, does Jeanine Pirro have a point when she says, look the grand jury won't even have the chance to hear
any evidence. I know that Boasberg invited the government to give him the evidence, but now, he has sort of short circuited the whole process.
ELIE HONIG, CNN SENIOR LEGAL ANALYST: So yes, there is some validity to the complaint from Judge Pirro here that, well, the grand jury is not even
going to get to see and assess this evidence, these documents that we subpoenaed from the federal reserve.
However, while a prosecutor has very broad discretion to issue subpoenas, trust me, I've issued plenty myself, it is not absolutely unlimited. And at
the far extremes, a judge can step in and block those subpoenas as we've seen here.
Now, given a lot of power as prosecutors, the power of subpoena is one of them, it is quite extensive, but it is not quite unlimited. And Richard, if
I could just pick up on one point that you were discussing with Phil that I think will be of interest to your financial viewers, which is, I know, a
primary focus of this show. If the appointment of the next Federal Reserve Chair is on hold until after this case goes through appeal, people are
probably wondering, well how long could that be?
Appeals in the federal system can take months, four months, six months, eight months. It may be that they will ask for an expedited appeal, but I
don't think a Court of Appeals is going to expedite simply because there is someone's name waiting over at Congress.
So, if indeed an appeal will put this on hold, expect it to be on hold for many, many months.
QUEST: Right, now, I am looking at Page 10 of the judgment where it talks about the improper purposes. If its sole or dominant purpose is improper. I
am sure you're familiar with those phrases -- those words in terms of that.
Now, the judge, Judge Boasberg basically says this entire thing was either a fishing expedition or it was animus, pure and simple, designed to
pressurize him. The sole and dominant purpose of the subpoena was to punish Powell, and it doesn't get much more brutal than this.
HONIG: Well, if you picture it like you see the symbol, the scales of justice, right? And if you look at it this way, the way Judge Boasberg has
explained this is if you look on one side, there is "mountains of evidence that this subpoena, these subpoenas were motivated by a bad purpose" to try
to pressure the Fed to take certain steps with respect to interest rates, which of course, is a patently impermissible reason to issue a subpoena.
On the other side of that scale, the judge says there is, "essentially zero evidence," essentially zero evidence that Jerome Powell committed a crime.
So Judge Pirro -- Jeanine Pirro is correct when she says well, we don't have to prove probable cause. We don't have to clear a very high bar in
order to issue a subpoena. But they do have to show something. They do have to show something more than, "essentially zero evidence of a crime."
QUEST: Let me just bring it to you, Senator Thom Tillis, the one who is holding up the whole thing. He says: "Appealing the ruling will only delay
the confirmation of Kevin Warsh as the next Fed Chair," which is exactly what Phil Mattingly was just talking about.
So the politics are actually -- never mind the optics, the politics are actually going against the President as well. And on this point of Judge
Boasberg --
[16:10:09]
I did a quick ChatGPT search to remind myself of some of those Boasberg's greatest classic hits. He has not been a judge that the President has
enjoyed much favor with.
HONIG: Okay, so I am more reliable than ChatGPT, but that much is correct. A couple of things to know about Judge Boasberg. He was originally put on
the local D.C. Superior Court by a Republican President, George W. Bush. He was then elevated later to the D.C. District Court by Barack Obama.
But yes, Judge Boasberg has tangled with the Trump administration and vice versa. Just last year, there was a contentious series of back and forth
decisions relating to Immigration. But also, if you're trying to assess what kind of judge is Judge Boasberg, is he an "activist judge" like
Jeanine Pirro said?
Back in 2017, there were lawsuits trying to force the disclosure of Donald Trump's tax returns. Do you remember? This was a huge issue. Democrats were
trying to pry loose his tax returns. They filed a lawsuit and Judge Boasberg rejected that. He ruled in favor of Donald Trump. He said no, you
do not get to see his tax returns.
So, if that is what we are calling an activist judge, I don't know where she is getting that from.
QUEST: Just briefly, it is -- as I am reading the judgments, in many of these cases, it is Trump versus Vance. It is somebody versus Trump.
Donald Trump is an entire jurisprudential library in terms of change of law in the United States.
HONIG: Well, he is definitely -- yes, I mean look, he is definitely rewriting the books. We are now 14 months into his second term. And I think
if I had to characterize it in the broad lens, Donald Trump is trying to expand executive power far more than any of his predecessors.
Every president has tried to expand presidential power, executive power to some extent, but Donald Trump is doing it exponentially more. And as we see
here, the courts have at times ruled in his favor. But as we see here, at times, the courts have drawn limits and have scaled that back in.
QUEST: All right, grateful for you, sir. Thank you.
HONIG: Thanks, Richard.
QUEST: Now, the latest numbers on the U.S. economy perhaps suggest it was far more fragile than we thought before even the war in Iran got underway.
PCE inflation, which is the Fed's preferred gauge, rose 2.8 percent 12 months to January. Core PCE, 3.1 percent.
Now bearing in mind target is two, you get the idea. You're well and truly over and have been for so long its almost not funny.
Q4 growth was revised downwards and this is the second revision down to 0.7 percent. It is a sharp reduction halving from the original 1.4 percent, and
that wasn't impressive even to start with.
Stephene Moore is with me, former economic advisor for President Trump. Good to see you, Stephen. It is good to see you, sir, to discuss all of
this.
Before we get into the economics of it. Poor Kevin Warshe, it looks like his nomination might be a bit longer held because of this business over the
Boasberg and over the subpoena to the Fed. Are you relieved that this subpoena has been quashed? Because there really wasn't anything against
Jerome Powell.
STEPHEN MOORE, FORMER TRUMP ECONOMIC ADVISOR: Well thanks for having me. And as you know, I am an economist, I am not a legal scholar, so I am not
even going to comment on the legal battle. But I will say that, look I think that we want to get this over with. We want to turn the page and move
on to the new Fed Chairman and that will be decided. That will hopefully be confirmed sometime in the next three or four or five months and I am here
to tell you, Kevin Warsh is an outstanding economist.
He is an expert on monetary policy. He believes in keeping the dollar strong and stable. And I think that's what most Americans want to see.
But in terms of the legal wrangling over this, I am sorry, I can't really weigh in on that because I just -- I am not really qualified to.
QUEST: Then, we will skate to the thicker ice of economics where we will both be on safer ground and look, these numbers, the GDP revision is
perhaps the most serious because it does show that the economy is weak.
Now, well, it is stagflation. I've just realized, of course, we are just about almost there. You've got virtually no growth. You've got inflation
rising and you've got this oil crisis. What would you do if you were the Fed?
MOORE: Well first of all, let me just say that, yes, I was disappointed with that downward revision for sure. But the previous two quarters, we had
pretty strong growth. We had over three percent growth in the second quarter, over four percent growth in the third quarter, and then it fell to
about one percent in this most recent quarter just ended.
So, that is a disappointment. No question about it. Now, we have this this entanglement in Iran with higher oil prices and so on, so, it is going to
be some tough sledding for the U.S. economy over the next couple of months, probably.
[16:15:10]
I do believe that the economy is structurally sound. I think once we get the situation in Iran resolved hopefully sooner rather than later, I do
believe we can be on a three to four percent growth path which is what Trump has set out to be.
Look, we've got the tariffs coming down. We've got people getting taxed less -- paying less taxes this year, so that's going to help spur the
economy. And so I feel pretty confident in saying by the second half of this year, we are going to see very strong growth.
QUEST: Except the war, of course. The war is the unknown here. You know, the administration is denying CNN's reporting that the administration
hadn't factored in fully or were surprised at the way in which the Strait of Hormuz has been closed off. That's a different subject, but my question
to you is, from an economic point of view the scenario of higher oil prices, much higher for the foreseeable future is pretty devastating.
FORBES: Well look, obviously, higher oil prices and higher gas prices at the pump are a negative for the economy. That's undoubtable. You know, I
remember in the 1970s when Jimmy Carter was president, we had flare-ups, obviously in Iran, in the Middle East, I remember we had gasoline lines
back then.
So look, yes, of course, anytime you have a slowdown on the supply of energy that reverberates throughout the economy. The one thing I would
disagree with you a little bit about is how fast it will take us to recover.
I believe once you get the Strait back open, once you get some kind of resolution on Iran, I think you could see the economy just, you know,
bounce back very quickly.
I mean, just look at how the stock market has been so herky-jerky over the last couple of weeks. Every time we get some good news in the Middle East,
what happens to the market? It goes way up and the oil price goes way down and then when we get bad news -- so my point is the market is looking very
closely at every reverberation of what is going on there.
And if we start to get a stream of good news, then I think you're going to see good news for the U.S. economy as well.
QUEST: Do you see strategy in all of this? And I see -- I can sort of see it in terms of, yes, you've got the strategy on the tariffs and yes, you've
got the strategy on the -- you know, Iran not getting a nuclear device, but putting it together.
We seem -- the U.S. economy seems to be lurching. The decision making process seems to be haphazard. The shift in policy and that is never good
to markets that look for certainty.
MOORE: I think, we are going to get some certainty. I think we are going to be victorious and quickly in Iran and I think once that happens, we are
going to see growth.
Look, Donald Trump has his faults, no question about it. But he is pro- business and he wants American business to succeed. He is pro-American energy. We are saving about a trillion dollars a year on regulations. We
did a big tax cut.
So I don't know. Ask me six months from now, and I can almost guarantee you, we are going to see an economy very much on a rebound.
QUEST: I agree with everything except one point from you, Stephen, I don't think you're old enough to remember Jimmy Carter and all of those. You
don't look it --
MOORE: Yes, for real.
QUEST: -- to remember those heady days of high prices.
Good to see you, Stephen. Thank you very much indeed.
MOORE: Thank you.
QUEST: Stephen Moore.
Coming up, it is QUEST MEANS BUSINESS here on a Friday. Reassurances, this is what we've just been talking about, reassurances from the administration
on global supply chains.
Unfortunately, the sort of pictures you're seeing go against that reassurance. A logistics expert about what happens and what options
shippers have, coming up next.
(COMMERCIAL BREAK)
[16:21:23]
QUEST: Donald Trump and his Cabinet have been offering reassurances that the war with Iran is under control, even as it seems economic disruption
continues.
Youve got brant now settled at over $100.00 a barrel for the second day in a row, $103.00. The President has said the war has been won, but less
specific on its end.
(BEGIN AUDIO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: When it is over and I don't think it is going to be long, when it is over, this is
going to bounce right back so fast.
BRIAN KILMEADE, FOX NEWS CHANNEL HOST: When are you going to know when it is over?
TRUMP: When I feel it.
KILMEADE: Okay.
TRUMP: When feel it in my bones.
(END VIDEO CLIP)
QUEST: And the decision to further ease sanctions on Russian oil that's on the High Seas already for the benefit of India has upset European allies.
The 30-day waiver affects that Russian oil stranded at sea. The White House says it will increase supply, therefore lower prices.
But the German Chancellor has described it as a wrong move and said the rest of the G7 agree. And Ukraine, President Zelenskyy, he said Moscow
could gain $10 billion through U.S. sanctions relief.
Speaking in Paris, it certainly does not help peace.
Anna Cooban is with me.
So we have so many -- so many factors, so many tentacles here, particularly the Europeans on Russian oil, with Zelenskyy, the administration. Where are
we?
ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Well Richard, I think we have to think about where were we a few weeks ago? We were talking about
the very real possibility of there being a U.S. brokered peace deal between Ukraine and Russia, and now we are looking at the U.S. actually waiving
sanctions that its held for years on Russian oil and also lifting sanctions on India.
Remember those secondary sanctions last year to try and punish India for continuing to buy Russian oil? There has been a 30-day waiver for Indian
oil refiners as well and I suppose the big question, Richard is, is this actually going to work?
On the one hand, the U.S. administration is saying that this is a short term measure and therefore there won't be a significant economic benefit to
Russia. So, they are downplaying that.
But then will this sanction free Russian oil coming to the market actually help bring down prices? Well, there is one estimate by Capital Economics
which is a consultancy, saying that the 124 million or so barrels that are currently stranded on ships, that's only going to tie the global market
over for two weeks to sort of replace what would have come through the Strait of Hormuz.
And so it is no surprise that we've seen oil settle above $100.00 a barrel again today -- Richard.
QUEST: This idea that say and whether it is accurate and true or not, the rumors are, and "The F.T." was reporting that -- I think it is the French
and the Italians supposedly were trying to do a side deal as you were talking about, but that doesn't go -- that arguably won't go down well with
the administration.
COOBAN: No, and this is a huge choke point. It is a huge danger zone right now. There is obviously been this reporting, there has been a bit of back
and forth about whether or not that is happening. But fundamentally, there is nothing really going through that Strait, it is but a trickle.
And we've had S&P come out today to say there has been 26 vessels, both oil tankers and container ships that have been attacked since the war began,
and there are some alternatives.
So there is this pipeline that runs from East to West in Saudi Arabia, but that really will not touch the size, Richard. It will not make up for the
huge volumes that are being lost through the Strait.
QUEST: I am grateful. We will talk more.
Next week, we will talk a little bit about Iran's oil production and how that might be actually benefiting the country in higher oil prices. Thank
you.
The war, as we've talked on this program, we heard from Maersk earlier in the week disrupted container and bulk shipping with vessels looking to
avoid the Strait, longer diversions, more costs longer time.
[16:25:09]
Some analysts now fear even the alternative routes may come under attack by Iran-linked militias. Don't forget you've got the Red Sea that's causing a
whole host of trouble over there.
Scenes like this in the Persian Gulf on Thursday. I mean, that is exceptionally powerful. Tracking all the developments is the logistics
firm, Flexport who are providing daily updates on their website.
And Ryan Petersen is the CEO of Flexport.
Good to see you, sir. It seems we only talk on crises, but there you go. That's the nature of the beast. What - how many containers or ships or
clients and customers have you got stuck at the moment because of this?
RYAN PETERSEN, CEO, FLEXPORT: Well, there is about 0.6 percent of the world's container ships are inside the Persian Gulf right now, so that's
the global number of what is stranded inside but many, many more are on ships that would have gone there, but have been diverted and are now
leaving containers at ports of call, wherever they may be.
You know, in fact, originally some of the carriers, some of the ocean carriers that operate these ships were leaving containers that were bound
for Dubai Port, Jebel Ali, they were leaving them in Oman at the port there.
But of course, two days ago, the Oman container port was struck by Iran, and so that has been now derailed. So, it is a huge disruption in ocean
freight and that is to say nothing about the air freight market and the energy markets.
QUEST: What about the nature of the freight being disrupted? Is it point to point for the region or is it transshipment through say Jebel Ali and its
various equivalents.
PETERSEN: Yes, exactly. So Jebel Ali is of course the major hub for shipments into the region, but it is probably more important as a
transshipment hub. It is the ninth largest container port in the world. So it is a pretty big location.
And so a lot of ships sail there, unload cargo and then it gets -- the container gets loaded on another ship bound elsewhere. The ships that are
outside are -- you know, they are going to get redeployed and continue to serve, so a 0.6 percent disruption of the fleet of the worldwide capacity
is not that big in the grand scheme of things; however, the big thing here is that the carriers, Maersk, you mentioned right before I came on, Maersk
had just started in February to go back through the Red Sea.
We have not been using the Red Sea as a container shipping industry since late 2023, because of the Houthis, which are an Iranian proxy group. And so
they had just started to get comfortable with redirecting ships through there and they have all cancelled that sailing now.
So that is the much bigger disruption.
QUEST: I am looking at a map now which will bring up, which shows about the Red Sea and the Straits and the Persian Gulf. If you're not going that way,
what else can you do?
PETERSEN: Yes, so I mean, of course, what they've been doing is going around Africa, but it takes a long time and we have actually at Flexport
set up a solution now for companies that need to get cargo to Europe from Asia to Europe is where the big disruption here is.
And if you need to get it there faster than that, the price of airfreight has doubled from Asia to Europe because of the Middle East crisis. So we've
actually set up a corridor now where you go across the Pacific Ocean on an express container ship, and then we will transfer it at LAX Airport and fly
it to Heathrow or other parts of Europe.
So you know, the industry is getting very creative here to create routings that work.
QUEST: Three-quarters of the way around the world.
PETERSEN: Yes, it is not the most optimal way to do things.
QUEST: I suppose that is for the high value stuff.
And finally, on the oil and the energy part, the LNG part, which is slightly different. There is no obvious and easy answer because there isn't
-- there isn't the pipelines that can pick up that particular slack and going in all directions.
I wonder, was all this incredibly foreseeable?
PETERSEN: I mean, surely it was in the scenarios as a probability -- a possibility, if not a probability that Iran would shut down the Strait of
Hormuz. So you have to think that they planned this, or at least they had some ability to predict that this would happen.
QUEST: Finally, one final thought before I let you go, give me one example without naming obviously ships or clients, but one real live example that
you've got at the moment that shows -- that brings this home to us, so we know what is happening.
PETERSEN: Yes, it is exactly that, is that we had a number of customers who had freight that were bound for Jabal Ali and the, the ocean carriers had
been planning to drop their cargo containers in Oman and leave them there until the Strait reopens, which was not optimal for anybody. They didn't
want their containers to be in Oman.
Well, now with Oman being shut down, they are starting to leave containers at the next port of call enroute. And so for example, this customer will
have their cargo left in Tangier in Morocco, because that's where the ship happened to be. Now, they've got a container in Morocco, not where them
wanted at all.
[16:30:18]
QUEST: Do you ever lose a container? I mean, forget where it is, or just sort of lose track of it?
PETERSEN: Yes, you know, in -- back in the peak of COVID, when there were so many containers loaded on top of the ships, you had a lot of bad
weather, and containers were falling off the top because they were overloaded. So, yes, we have lost containers falling into the --
(CROSSTALK)
QUEST: Oh, yes. All right. So good to see you, sir. I'm grateful. Thank you. We'll talk more. Thank you for joining us.
A U.S. military refueling aircraft has crashed in western Iraq. The deadly incident, six dead. I'll tell you what in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. We have a lot more QUEST MEANS BUSINESS coming your way.
It's not any oil that's stuck. I'm going to be talking to the chief executive of a major fertilizer company and how their supplies have been
impacted.
And the head of Ireland's foreign investment agency will discuss how geopolitical tensions are casting a shadow over cross border investments,
only after the headlines, because you know how this goes. This is CNN. And on this network, the news comes first.
A federal judge has struck down the justice department's subpoena against the Federal Reserve Chairman Jerome Powell.
Judge James Boasberg said the evidence suggests the government wanted to pressure Powell into lowering interest rates. U.S. Attorney for the
District Jeanine Pirro responded. She called Boasberg, an activist judge.
The U.S. military says there is all six people, all six crew members on board the refueling jet were killed when the aircraft crashed in western
Iraq. U.S. Central Command says the crash of the KC-135 Stratotanker was not the result of hostile or friendly fire.
[16:34:59]
At least one person has been killed in Iran's capital after explosions are seen at the annual Quds Day rally in support of Palestinians. As one of
many large demonstrations held across the country today, state media showed demonstrators burning American and Israeli flags and holding portraits of
Iran's new Supreme Leader Mojtaba Khamenei.
And now, some details now on the U.S. Air Force jet that we told you about the crashed a few moments -- we talked about a few moments ago.
Central Command says two planes were involved in the incident in western Iraq, while operating during the war. One of the crashed killing all six.
Officials say the others landed safely in Israel. And this shows the damaged plane at Ben Gurion Airport. You can see the plane's tail fin is
damaged.
Jeremy diamond is in Tel Aviv. So, we have a plane that's damaged, but you also have the one that crashed, and yet, they are saying that this wasn't
the result of military activity. It wasn't the result of being brought down by the Iranians. Is -- have I got that right?
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Yes, that's right. The U.S. military is insisting that this was neither the result of enemy fire nor of
friendly fire, instead, calling this a tragic incident with the U.S. defense secretary saying, war is hell, war is chaos, and bad things happen.
Now, the U.S. military is going to investigate this incident. If you look at that image of the tailfin of one of those refueling tankers, the one
that made it back safely, you know, it points to perhaps some kind of a mid-air collision there.
I should note that an Iranian proxy group in Iraq, the Islamic resistance in Iraq, they have claimed responsibility for downing this refueling plane,
but they didn't provide any evidence to substantiate that claim.
So, again, all indications pointing to a tragic incident here, in which six U.S. service members were killed, bringing the total number of service
members who have been killed since the beginning of this war to 13.
QUEST: And I mean, it will be regrettable if we end up in this situation where who do we believe.
If, you know, one side saying that they brought it down, and the U.S. is saying, no, you didn't. And yet, we have the damage from this plane. The
general public could be put in a very difficult position of working out what really happened.
DIAMOND: Yes, absolutely. And I think that's why the transparency of this investigation will obviously be important. You know, we have seen -- this
is not the first incident that the U.S. military is having to investigate from this war. Another incident very different, of course, was the bombing
of that school. That girls' school in Iran, with initial investigation by the U.S. military pointing to U.S. accidentally targeting that school. We
are still waiting, of course, for the full results of that investigation, although, we did hear the U.S. Defense Secretary today, confirming that he
has appointed a general officer to carry out that investigation to its conclusion.
But this is all obviously happening in the context of a war, Richard, which we still don't know what ultimately the consequences will be. I mean, we
are watching as, you know, the Strait of Hormuz is closed. This is leading to huge global market issues and uncertainties. And so, obviously, you
know, when a war begins like this, you see the spiraling of consequences that perhaps the United States and Israel didn't initially anticipate, and
we truly don't know what the ultimate results of this war is going to be.
As Israel is doubling down on the notion of regime change, the United States as well, to a certain extent. Although, we heard President Trump
today casting doubt on, you know, how much that can actually happen in terms of the Iranian people rising up amid U.S. airstrikes there.
QUEST: Jeremy, I'm grateful for you, sir. Thank you very much, indeed. Joining us in Tel Aviv, late at night.
The war could push grocery prices higher by disrupting the trade of vital nitrogen-based fertilizer. The chief executive of Yara International areas
(PH). He will be with me after the break. Put that into perspective. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:41:59]
QUEST: Today's inflation report showed us that people in the U.S. are spending more on groceries, and spending on food and beverages rose more
than eight percent in the -- into January. The closure of the Strait of Hormuz is very likely to raise prices at the grocery store. You heard
earlier from Flexport about the sort of difficulties people have got because more than a third of trade -- and it is one of the reasons. More
than a third of globally traded urea fertilizer passes through the waterway.
The disruption could have outsized effects due to the timing of crop cycles. Svein Tore Holsether is the CEO of Yara International that produces
fertilizer and related prospect -- their products.
He joins me from Oslo. Sir, you know, we talk about many things on QUEST MEANS BUSINESS. And I know from previous things, fertilizer is extremely
important in the global production chain. So, how serious is what's going on in the Gulf?
SVEIN TORE HOLSETHER, CHIEF EXECUTIVE OFFICER, YARA INTERNATIONAL: Well, the situation itself is very serious, with significant humanitarian
consequences. But on -- but on top of that, we now see a significant impact to the food system as well. And fertilizer is not just another commodity.
Half of the world's food production is a dire result of fertilizer.
So, when we see disruptions like this, an impact to the ability to produce fertilizer, it has global consequences.
QUEST: But what's the problem? Is it the, you know, oil to make, and because, of course, that's another problem, of course, the production
process.
Or is it that the fertilizer, once it's been produced, can't get in and out?
HOLSETHER: Well, that's the seriousness of this situation, because it's at least a triple hit here. Now, first, it's the increased energy prices that
are making it more expensive to produce fertilizer. Then, it's the inability to transport gas to produce fertilizer in other parts of the
world, like we are seeing in in parts of India right now. And then, the region itself is a major producer of fertilizer, and when that fertilizer
is not able to get out of the Strait of Hormuz, that also has implications.
And we have seen that there have been production disruptions in Qatar, Iran, is shutting down.
QUEST: Right.
HOLSETHER: And, you know, it's difficult to assess, but we are talking about possibly up to a million tons of urea fertilizer that is not being
produced at the moment.
QUEST: So, just go through for me, how this -- pardon the phrase, how the fertilizer is spread? By that, I mean, of course, how the fertilizer --
then, the knock-on effects into the production process, onto the farms, into the crops, onto the industrial production.
HOLSETHER: Yes, Richard. Think about fertilizer as food for the crops. So, we're feeding nutrients in order to grow healthy and large crops, and when
that's being disrupted, well, either you will not have crops or they will be significantly reduced.
[16:45:04]
And for some crops, you are reducing the crop yields by 50 percent, already the first season, if you're not able to put nitrogen fertilizer out in the
field. And when I'm talking about a million pounds of fertilizer, it's hard to comprehend, but if I try to translate that news on some average
calculations on what that I would mean --
(CROSSTALK)
QUEST: Yes.
HOLSETHER: 1 million pounds of fertilizer a week that is lost? That is 20 billion meals approximately, that you would lose in food production as a
result of it. So, then, it translates quite quickly into a food security and a food cost issue as well.
QUEST: When do you expect to see food prices starting to rise, or are they already going up?
HOLSETHER: Well, this is the challenge that is meeting the farmers right now. They get a higher fuel bill, they get higher input costs, and yet, the
food prices have not started to increase significantly yet.
So, farmers are now being asked to make a major decision on this part of the crop cycle, how to apply fertilizer and how to run their farm, and they
haven't seen the food price --
(CROSSTALK)
QUEST: Right. So --
HOLSETHER: You know, the crop has not increase yet.
(CROSSTALK)
QUEST: What --
HOLSETHER: So, that's the challenge. But, if they don't get the conditions now to go, that will be a big issue. Right?
QUEST: What can you do? What can you do? I mean, the problem is now clear cut, and we don't know how long the war is going to last.
Therefore, it's every man, woman for -- and child for themselves in terms of how you handle this crisis. What can you do to alleviate some of the
problems?
HOLSETHER: Well, it's important we come together now. Governments need to support farmers. My colleagues, all 15,000 of them are working around the
clock now to support farmers. And we have 120 years of economic competence in order to help the farmers to deal with scarcer availability of
fertilizer, more expensive fertilizer. How do you do that in an optimal way, in order to get as most -- as much crop you less possible, given the
constraints right now. And we have technology to do that. Satellite technologies, sensors, and so on, in order to help the farmers to drive
this. But there needs to be an urgent rallying around farmers now to support them in this challenging situation.
QUEST: I'm grateful, sir. Thank you. Fertilizer is terribly important.
And we have got -- Ireland has had a big boost from foreign investment in recent years. We'll have to navigate through some headwinds to continue
that trade. There he is. The CEO of I-D-A Ireland, IDA, joins me to discuss in a moment.
(COMMERCIAL BREAK)
[16:50:01]
QUEST: Manufacturing in Europe just keeps getting into more difficulties. Production in the E.U. shrank 1-1/2 percent in January from the month
before. And some of it has to do with Ireland, which has long benefited from foreign investment.
The return on that investment stagnated over the last several months, and the war could make it difficult to get more companies setting up in
Ireland.
Europe and the Irish are especially sensitive to commodity price shocks, as we have just been hearing.
Michael Lohan is the chief executive of IDA Ireland, the inward investment. And the difficult -- I mean, this is really tricky times now to -- both to
attract new investors and to ensure the success of those that are already there.
MICHAEL LOHAN, CHIEF EXECUTIVE OFFICER, IDA IRELAND: Yes. Thanks, Richard. You are correct. There certainly is dynamic -- it's a dynamic time. But
maybe if we go back and look at the investments for last year, we had a record year in terms of FDI investments into Ireland. Over 323 discrete
investments, which was a 30 percent increase in the year before.
So, in some ways, that actually is running counter cyclical to the change and -- that we have seen over the last 12 months. And it's my belief that
what's driving that is actually the proven stability that is Ireland, as companies continue to look to invest -- to invest in locations where there
is economic stability, where there is pro enterprise policies, and where they can serve European and global markets.
QUEST: Does that stability, does that play up during a time of war like we have now?
LOHAN: I believe so. And I think stability, you know, it's like -- it never goes out of fashion. And I think in Ireland, we have consistently held a
very stable and pro enterprise approach to foreign direct investment, and indeed, to our indigenous companies as well. And no more so, I think, when
there is -- when there is challenge in the world, I think, people look for havens of security and support. And in Ireland, that's what you get.
And we see that across whether it's in the technology sector, across financial services or indeed in high value manufacturing.
(CROSSTALK)
QUEST: Right. Do -- are you seeing increased productivity as a result of, say, for example, Draghi, in the Draghi report, which identified very
clearly the barriers to greater growth. And I have -- I'll freely admit my cynicism and skepticism that the E.U. would ever get its act together in a
timely fashion.
LOHAN: Yes. So, I think it's been certainly a period of particular reflection for Europe. The Draghi report and the Letta report, you know,
quite clearly highlighted the challenges, both from -- if you want to call it, the innovation gap that exists, and indeed, maybe from a policy and
over regulation.
And at the current situation, we have Europe very much focused on a number of -- there is over 10 omnibus bills making their way through the European
Commission at the moment. And indeed, in Ireland, we -- while actually, we are not just relying on Europe in that response, but we also have our own
competitiveness and action plan, led by the government and led by Minister Peter Burke to drive that efficiency.
Because within Ireland, we are very clear, we are an open economy, and we have to remain competitive and we have to remain agile, and that's been our
success in the past.
QUEST: You are in a unique position because of not only the relationship to the E.U., the central role of the single market, but the U.K., where you
have a special relationship, and the U.S., where you have -- so, blessed and cursed, of both, in a sense, both at the same time.
LOHAN: Yes. Well, I'd certainly like to see it more as blessed, if I'm honest. And I think, even today, we had -- we had the U.K. Prime Minister
in Ireland with our Taoiseach, you know, strengthening, I think that relationship on the east side, you know, with the U.K. I think, that's
important as well for the global economy and for the European economy that we see the U.K. strengthen this relationship both with Ireland and indeed
Europe.
And, of course, Ireland holds a unique position in terms of that relationship between the US, as we are both here in New York today.
QUEST: Right.
LOHAN: And we look -- and we look to the U.S. and European relationship. It's the strongest trading relationship in the world. And over the -- over
this -- over these days and into next week, we will be highlighting that strength, not just from an Irish perspective, obviously, and the two-way
relationship and the economic benefit that comes with it, but also how that strengthens, you know, from a U.S. and a European economy.
QUEST: I have just realized, of course, next week, I'm just looking at those pictures from last year. I have just realized why you are all here.
It's St Patrick's Day next week, isn't it, of course.
And you will be down in -- you will be down in Washington. I assume, or maybe you won't, but the Taoiseach will be, perhaps.
LOHAN: Yes.
QUEST: Which is this tradition.
LOHAN: It is, absolutely. And you are correct. So, I'm here as part of the delegation. I traveled to D.C. at the weekend and we will be in D.C. with
the Taoiseach.
(CROSSTALK)
QUEST: So, what's your message going to be, OK, to President Trump and Howard Lutnick and others?
[16:55:05]
What are you going to be?
Cut the tariff. Cut the tariffs. We don't deserve them.
LOHAN: Well, I think, our message will be -- will be -- will be quite clear, and will be very direct. It will be that, you know, we have a strong
relationship between Ireland and the U.S. It's a -- it's a relationship that trades in both directions. And just to say, Richard, is, you know, you
talked about the strength of foreign direct investment into Ireland, and the U.S. has been a pivotal contributor to that.
But Ireland is now the fifth largest investor in the United States. You know, we are contributing. So, it's a two-way flow, in terms of economic
benefit, in terms of cultural benefit. And of course, it's deep in history. You know, U.S. is celebrating 250 years. And, of course, three of those
original signatures actually were Irish as well. So, there's a long historical link between our two countries.
QUEST: Of course, anyone who is -- who is been through St Patrick's Day here in New York knows quite the experience that it's going to be.
I'm grateful to you, sir. Thank you for joining us. Thank you.
(CROSSTALK)
LOHAN: Thank you.
QUEST: I'm going to have a quick look at the markets.
Wall Street finished lower. Brent settled above a hundred. That's the important thing. Hundred world (PH) as well for the second day. The big
board lost 119 points. The NASDAQ was off. It really has been a torrid week, and not one for the faint hearted. Take a look at a bit at the Dow
30. A little see, see be. Evenly -- no, not evenly. Well, you sort of evenly. You get the idea.
Salesforce down, 3.4. Apple has heavily down, Nvidia's heavily down, and Boeing up at the top. Don't often see that. We will take a "PROFITABLE
MOMENT" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT". I -- whenever there is one of these judgments from of significance, I always try and read the original
judgment, because I think you get a much better feeling, even if you don't read it all or fully understand all the legal bits in it.
Excuse me. And reading Judge Boasberg's judgment, it's quite blunt. Page 22. In light of all the evidence, the only reasonable inference is that
government targeted Chair Powell out of malice or an intent to harass, fishing expedition, find something to pin on him, to pressure him.
And he then goes on: The government, you are judges. They invite him because there is no evidence by which it can be found.
All in all, this is a really nasty mess that should never have happened. Whenever one thinks of Jerome Powell's monetary policy, the man's integrity
seems to have been extremely highly thought of by all.
[17:00:08]
And yet, for the reasons that the Judge Boasberg goes into, the subpoena was issued and this crisis began. It was a crisis that simply never needed
to happen.
END
