Weill: Global Economy 'in Terrific Shape'
DEBORAH MARCHINI, CNN ANCHOR: Where better to get a picture of financial market activity and the economy than at the helm of the nation's largest financial institution and one that is growing. Our guest this morning is bringing us his first live interview from Williamsburg, where he is at the convention of CEOs. Sandy Weill is chairman and chief executive of Travelers -- or Citigroup now it is known, and is joining us from the Business Council Summit in West Virginia. We welcome you.</s>SANDFORD WEILL, CITIGROUP CHAIRMAN & CEO: Thank you.</s>DAVID HAFFENREFFER, CNN ANCHOR: Mr. Weill, I do want to begin, first of all, with the Federal Reserve. Everybody is seemingly talking about their expectations for what the Federal Reserve will be doing come Tuesday. Are you in the 25 or 50 basis point camp, and what are your impressions of the Fed's strategy for shaping the economy now?</s>WEILL: Well, you know, I think the Fed has been trying to cool off the economy for the last year. We've had five 25 basis point increases already, and I would expect, as everybody else does, that we will have another one this coming week. Whether they do 25 basis points and continue to say that there's an outlook for further increases or they do 50 now and indicate, possibly, that they may slow down in the increases, I don't think it's really that important. I think that what they have done is beginning to affect the economy, and I think we're beginning to see the beginning of a slowdown in the economy.</s>MARCHINI: It certainly has affected the stock market, we're seeing intense amounts of volatility there. What does that say to you?</s>WEILL: Well, I think that we really went through a period where there was indiscriminate buying of a lot of the high-tech stocks, and I think when you think about the Internet, it's going to really revolutionize and transform our global economies, but yet, a lot of these companies that are public today won't be in existence five years from now. But I do believe that the value of all those technology stocks five years from now, as a collective, will be a lot higher than it is today.</s>HAFFENREFFER: Are you concerned how a higher interest rate environment here in the U.S. might impact your shares of Citigroup?</s>WEILL: I think our company is not really that affected by interest-rate increases of 100 or 150 basis points. We had had over a hundred basis point increase in rates, and yet, in the first quarter, we earned $3.6 billion, which was up 50 percent from the year before. So our company is doing very well.</s>MARCHINI: When you look at the economy overall, what's your sense of it? Do you think that things are going along well?</s>WEILL: You know, I think that the U.S. economy was really growing too fast, that the labor market got very, very tight, which is creating a problem for a whole host of companies in being difficult to replace workers and costs are going up somewhat. So I think that the U.S. economy cooling down a low bit is good. However, if you look around a world, the global economy is really in terrific shape: Asia's growing, Latin America's growing, Europe is starting to grow. So I think we are in an environment, from a global perspective, that is really terrific. And since this world is becoming a smaller place and we trade with each other much, much more, I think that that's really the important key to the outlook, so therefore I'm very optimistic.</s>HAFFENREFFER: You speak of global growth and international growth. Yesterday, Citigroup took one step closer to the purchase of Poland's biggest corporate bank. Is Citigroup essentially done expanding in the U.S. and more angling toward growth overseas?</s>WEILL: I think that we still like the U.S. market for financial services and are looking to grow some parts of our business, but we think that the growth rate in the emerging markets is going to be far higher than that in the United States. So, as you mentioned, we're buying Bank Hanloi (ph) in Poland. We're very optimistic about the Polish economy long-term. Last week, I was in Asia and we announced a strategic relationship with the Fubon Group in Taiwan with an intention to grow our insurance businesses through Asia together with them.</s>MARCHINI: All right, well, clearly, you're going to be a busy man. Sandy Weill, chairman and chief executive of Citigroup, we thank you for joining us this morning from the Green Brier.