WSJ What’s News - How One Central Banker Is Sizing Up the Iran War

Episode Date: April 7, 2026

A.M. Edition for April 7. With markets holding their breath ahead of President Trump’s deadline to bombard Iran’s infrastructure if it doesn't reopen the Strait of Hormuz, National Bank of Belgium Governor Pierre Wunsch explains how policymakers are coping with the ripple effects of the war. Plus, Bill Ackman’s Pershing Square Capital offers to buy Universal Music Group, the world’s largest music company and record label behind Taylor Swift and Bad Bunny. And Journal marketing reporter Patrick Coffee says some brands are adding ‘no AI’ disclaimers to advertisements to stand out amongst the slop. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Markets hold their breath ahead of President Trump's looming deadline to take out Iran unless it reopens the Strait of Hormuz. Plus, how should central bankers respond to the ripple effects of the war? We'll ask one. If we are not at the end of it by June, we're probably going to have to high grades. But if it would morph in some form of financial crisis or tension in financial systems, then it really becomes much more difficult to manage. And Bill Ackman makes a play for the world's largest music.

company. It's Tuesday, April 7th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Iran and the U.S. are rejecting each other's diplomatic offers, just hours ahead of President Trump's deadline to start bombing Iran's bridges and power plants unless it opens the Strait of Hormuz. We report that Iran has rejected a proposal from Washington that would have seen a 45-day pause in fighting in exchange for reopening the strait, saying that it wanted a permanent ceasefire, the lifting of sanctions, compensation for war damages, and a new arrangement for governing the strait going forward. In response, President Trump said that Iran's proposal was, quote,

not good enough, but it's a significant step. U.S. stock futures are flat and oil prices are hovering around $110 a barrel ahead of this evening's deadline. U.S. health insurance stocks are rallying off hours after the Trump administration said it would boost 27 Medicare Advantage payments by almost 2.5%. That dramatic increase, which represents about $13 billion in additional payments to insurers, comes after an earlier proposal to hold payments flat, drew fierce criticism from the industry, and torpedoed shares back in January. While the move signals strong federal support for the private insurer program, officials, are proposing to eliminate a lucrative billing practice by requiring that diagnoses be linked

to specific medical services. A new rule that's meant to prevent insurers from receiving payments for medical chart reviews that lack an associated doctor visit. Samsung is forecasting a more than eightfold jump in its Q1 operating profit as demand for its AI chip source. Journal tech reporter G. Young-Sone says it's a major reversal of fortune for Samsung, who just over a year ago had simultaneously yet to make a splash with its specialized HBM memory chips used in data centers and was seeing its more conventional chips pile up on shelves. A year ago, these conventional memory chips were in a demand slump.

But today, they're in a massive shortage, mostly because demand has bounced back for data servers that are now needed to support all the AI models that are being used today. So AIS basically puts Samsung in a very good position. They're continuing to see strong demand for HAPS. while prices of conventional memory chips are surging exponentially. As a result, Samsung shares are performing very well. They're up more than 60% since the start of the year, and that's even as markets have remained volatile due to the Middle East conflict.

Meanwhile, fellow South Korean consumer electronics giant LG is forecasting a Q1 earnings rebound with profitability slated to improve as it beefs up production in the U.S. to avoid tariffs. Bill Ackman's Pershing Square Capital is offering to buy Universal Music Group, whose roster includes the likes of Taylor Swift, heard there, Kendrick Lamar, and Billy Eilish. Pershing Square said the transaction, which would involve a new entity listing on the New York Stock Exchange, is expected to close by year's end. Universal didn't immediately respond to a request for comment. The deal would value the company at around $60 billion.

and its stock is soaring on news of the offer. And Amazon and the U.S. Postal Service have made a deal. After threatening a two-thirds pullback in the number of packages that it ships through the U.S.PS, we exclusively report that a tentative agreement will lead to just a 20% reduction in volume. If approved, the deal would avoid a major revenue drop for the struggling post office and avoid delivery headaches for Amazon, especially in rural areas. Coming up, will the shock? of the Iran War force Europe into interest rate hikes before the summer. And we'll look at the

brands saying no to AI slop in their ads after the break. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my head of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need, with plans that harmonize your business, your family, and your dreams. Get financial advice that puts you at the center. Find your advisor at IDPrivatewealth.com. A month into the Iran War, Gulf, oil, and gas remains mostly locked off from the world.

Energy prices keep rising. And even with second order effects caused by fertilizer shortages or disrupted shipping, still months off, we are already seeing higher inflation cropping up in, statistics. So how should a central banker react? Do nothing? Well, you risk higher prices being baked into an economy still scarred by the pandemic or raise rates and risk sapping economies of their growth potential. One central banker facing just such a decision later this month when he'll vote on the European central bank's next rate move is Pierre Vunch, the governor of the National Bank of Belgium. Governor, thank you so much for being with us on what's news.

Sure. How much is the war in Iran dominating? your attention these days? 95%. No, I mean, I'm also running an institution, but beyond that when talking about monetary policy, it is, of course, the major source of uncertainty. And I would say our reaction function is probably of second order in terms of uncertainty compared to the uncertainty in just the lengths and the depths of the crisis. Of which are you more certain now than you were, say, a week ago?

Not really. I mean, we listen to the communications coming from the U.S. and also the reactions from Iran. It's not easy to read. And like the markets, we get signals, I would say, every day in one or the other direction. And of course, the lengths of the crisis, you were, of course, referring to the fact that typically for a central banker, a supply shock, an energy shock is one of the most difficult to deal with. And of course, last time we were a little bit late, you know, team transitory before acting. So this is something probably we have to draw the lessons from. Just very top level. The differences between 26 and 2022, inflation's not as high. What else do you see as the major differentiators between these two situations?

Well, you don't have the same level of bottlenecks that were all over the place and took us some time to understand that this was really a very specific crisis, the exit from COVID and then the energy crisis on top of that where we had lost 40% of our gas supply from Russia. So we're a little bit less exposed now on the inflation front. But at the same time, after a lot, long period of flow inflation, economic agents, firms and workers were a little bit taken by surprise. So it took some time before people would react to the shock and you started having the second round effects. So I guess now the question is, okay, the shock might be a little bit less important from a European perspective than it was back then. But at the same time, it might be that firms say, okay, we don't want to be the last one to raise our prices. They might react more quickly. And then one of the big differences is that, especially in Belgium and France, we don't have the fiscal capacity to absorb the shock as we did for COVID or as we did for the

Ukraine crisis. One of the concern is that, and we see that in Belgium, if political parties want to do it as they did before and basically try to absorb the shock by increasing public expenditure, this might more into potentially some tensions on the fiscal front. You might see some downgrades from rating agencies down the line. So far, I think we can deal with this crisis. I would say if we are not at the end of it by June, we're probably going to have to hike rates. But if it would morph in some form of financial crisis

or tension in financial systems, then it truly becomes much more difficult to manage. You said if we don't see resolution by June, we might have to hike rates. There is a rate decision coming this month. You will be voting on that. Should a rate increase be on the table in a few weeks? Or is that premature?

You know, in a way, hiking 25 basis point wouldn't change much. Inflation is already at 2.5%. We're not going to be able to control the direct effects of the crisis. We need to move at some point to control the indirect effects. So the issue is more of an issue of communication. What would you signal by hiking in April or in June? The way I feel comfortable putting it is, if this is not done by June, I think we are going to have to hike. But I don't want to exclude a hike in April. Now, if this lasts, we are going to have also to work on demand. And we need some demand destruction. So just giving subsidies for people to be able to keep buying gas and oil without feeling too much of an impact would not be the right policy because we need some demand destruction.

And we've been able to reduce, for instance, natural gas consumption during the gas crisis after the war in Ukraine by 20%. But that was on the basis also of administrative measures like reducing the temperatures in buildings. So we need collectively to reduce our demand because there is just less gas. It's annoying. Earlier, you mentioned 95% of your attention was being taken up by the Iran war. Are you worried that with this crisis commanding the headlines day in and day out, it's distracting Europe from its other challenges? Well, yes and no. I mean, the long expected hoped for recovery in Europe will be probably delayed again. At the same time, I think it will allow maybe to refocus, for instance, on our

energy policies where, you know, we had, in a way, bubble on climate ambition, that we were extremely ambitious and we thought people would back that, and then there was a backlash. We might refocus now also on the strategic autonomy aspect of it. We know we are dependent on the rest of the world, the U.S., China, but also for energy, the Middle East on many fronts. And hopefully this is going to again confirm that we need to find a good balance between all these considerations and that we should not throw away the green agenda. I think the green agenda we need to be disciplined. It's difficult for the tradable sector in the energy-intensive industry, because we don't have cheap ways to decarbonize.

But on the households, France, electric vehicles, renewables, this is more or less a no-brainer. From this perspective, I think the current shock could help. It is also basically reinforcing again the feeling that Europe has to be united, confronted with these shocks. And do you feel that among your governing board peers heading into the end of the month? Yeah, I think that the spirit is one of,

We've been confronted already with so many crises over the last few years. Broadly speaking, we've done what we should do. We were back at actually at our target of 2%. So we'll have to do it again. Pierre Vunch is the governor of the National Bank of Belgium. Governor, thank you so much for being with us on What's News. Pleasure. And finally, what's AI slop and what's not to try and stand out from the crowd,

Journal Marketing and Advertising Reporter Patrick Coffey says that some brands are now adding no AI disclaimers to their ads, hoping to be spared from a growing backlash against content made with AI. We're already reaching the point where people are so distrustful that they're starting to assume if they don't see otherwise that things are AI generated. A recent survey from Gartner, a market research firm, found that 68% of consumers regularly question whether the material and they see online is real. Another report from a software firm found that 63% of consumers think brands have a duty to disclose when they use AI in their marketing. But the rules at the moment are essentially that there are no rules. Every platform has made some apparent attempt to automatically identify and label AI generated materials. But they've already thrown up their hands and said this is just too big of a problem for us to handle. While social media platforms may be sitting out this fight, some regulators aren't.

New York last year became the first date to pass a law requiring that businesses disclosed the use of AI-generated humans in their marketing content, with the law scheduled to take effect in June. And that's it for what's news for this Tuesday morning. Today's 100% authentic show was produced by Hattie Moyer. Our supervising producer was Daniel Bach, and I'm Luke Vargas for the Wall Street Journal. we will be back tonight with a new show. And until then, thanks for listening.