WSJ What’s News - Why the Iran Peace Deal Won’t End Rate Hikes

Episode Date: June 16, 2026

A.M. Edition for June 16. President Trump’s Iran deal may be providing relief for markets, but central bankers are not convinced the inflation spike is over yet, with the BOJ and RBA warning of higher prices for longer. Plus, WSJ tech reporter Georgia Wells details how AI is supercharging deepfake nudes, with more than half of teens having created a nude image, unleashing a new form of bullying amongst kids. And, Iran’s World Cup team was ordered to leave the U.S. after their opening match against New Zealand. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Central banks try to read the tea leaves on how an end to the Iran war would affect inflation. Plus, California's Gavin Newsom says his presidential aspirations have made him the Justice Department's next target. And parents and schools struggle to protect young people as nudify tools proliferate. AI has made it trivially easy for anyone with a phone to digitally undress people and post the content online. And really it's falling on parents to try to help their children regain a sense of safety as they try to scrub these images from the Internet. It's Tuesday, June 16th. 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. G7 leaders are gathering on the shores of Lake Geneva today for their latest summit.

Compared to more sleepy gatherings in recent years, policy action is front and center this year, ahead of a signing ceremony scheduled for Friday to end the Iran war. Journal White House reporter Natalie Andrews is at the summit. Trump really landed in France with some good news to share, right? He was able to say, hey, we engaged in this conflict. He had expressed a lot of frustration at allies for not joining him in the war, but he's also coming to these meetings with some allies that he's sparred with, being able to bring them good news.

He can say, hey, look, the cost of oil is coming down. This will get ships moving through the strait quickly. He's asked allies for help in the demining, but he's saying that ships are already moving. Well, if talk of Iran could be less heated with a peace deal in sight, Natalie said that the wild card today comes in the form of Ukraine's Vlodomier Zelensky, who, along with his European backers, is hoping that a combination of battlefield gains and Iran fading as a U.S. priority will put his country back in the spotlight. The tide seemed to be turning in Ukraine's favor in the war, and Europe will definitely be making that case to Donald Trump.

Trump has been very focused on Iran, and now with the MOU sign, he may focus his attention back to Zelensky. He's often expressed a lot of sorrow over how deadly and tragic this war has been for both Russia and Ukraine, and he certainly would like to get to a deal. It's just been really hard to get there. The summit is set to continue tomorrow with a meeting on tech, featuring OpenAI's Sam Aldman and Anthropics, Dario Amadee. Well, while the details are still being worked out, Trump's peace deal with Iran has fueled relief among central bankers worried about rising inflation. Concerns around runaway prices prompted several central banks to halt rate cuts this year, and for some to begin hiking rates, like last week's ECB decision and the Bank of Japan. today. Though for the Reserve Bank of Australia's Governor Michelle Bullock, that calculus sounded like this earlier. The cash rate has been increased by 75 basis points since the start of the year.

These increases are tough for households with mortgages who are also facing high inflation, but they are necessary to slow demand to make sure we get inflation down. I want to be very clear that inflation remains too high. Leaving rates on hold today will allow the board to assess how these previous increases are flowing through the economy. Paul Hannan is the economics editor for Dow Jones Newswires and says it's been difficult for central banks to settle on a firm outlook for the economy this year. The Fed, the Bank of England, and there's also Sweden and Switzerland to come, will, you know,

obviously be happy that there is the prospect of peace on the horizon because that limits the prospect for inflation getting out of control overcoming months. And in the U.S. you'd expect to and indeed you already have seen gasoline prices coming down. But at the same time, there is still inflation repressure in the economy, and who knows how long it's going to take for that to cool down. And they will mostly, I think, want to leave open the possibility that they might raise interest rates again in the future. And so while the war may be coming to an end,

the pain for consumers is likely to persist. One thing that we can say about the period that we live in is that the shocks come thick and fast, and most of them are not good. Setbacks to the energy sector or supply chains that seem to be pushing prices higher. You know, food seems to always be part of this story. It's not a situation in which inflation is likely to settle down quickly. It's just a more troubled world that we live in, and central banks are very much on their guard. Economic worries are also weighing on the world's second largest economy.

with new data this morning showing Chinese consumer spending dropping for the first time since COVID as household demand continues to weaken. The U.S. military says that eight crew members are believed dead after a U.S. Air Force B-52 bomber crashed in Southern California yesterday shortly after takeoff. Edwards Air Force Base, the site of the crash, said that the incident is under investigation and that two of the eight on board were employees of B-52 manufacturer Boeing. The plane, which came into service in 1952, has been an Air Force staple since the Cold War. Despite its age, the Air Force is planning to replace 1960s-era engines on the planes so they can

reach 100 years of service. California Governor Gavin Newsom is accusing President Trump of political retaliation by ordering a federal investigation into him and his wife. In recent days, federal agents have knocked on the doors of family friends and former employees. not because they found a crime because they're simply trying to find one. We understand that federal prosecutors in California are conducting several interviews related to the governor, including one examining his wife's taxes and another into his former chief of staff. The FBI and the U.S. Attorney's Office in Sacramento declined to comment. And it is another primary day with voters in Alabama, Georgia, Oklahoma, Virginia,

and the District of Columbia heading to the polls. In the nation's capital, Democrats will be making their selections in a crowded primary to be the district's next mayor. And leaving the polls is Councilwoman Janice Lewis George, a Democratic socialist who's pledged to limit local cooperation with federal immigration enforcement and stand up to the White House. I won't back down from Trump or the mass ICE agents who threaten our neighbors because D.C. is worth fighting for. President Trump last week said he would consider a federal takeover of D.C. should she become mayor. And we'll get your results from that election and other key races on tomorrow's pod. Coming up, AI has supercharged the creation of deep fake nudes, creating a whole new form of bullying for young people to contend with.

We've got that story and more after the break. The proliferation of AI has made it very easy for any of us to make flashy content with a few prompts. And those tools have also made it all too easy for anyone with a phone to digitally undress people and post the content online. Journal tech reporter Georgia Wells says that explicit deepfakes are unleashing a new form of bullying and harassment among young people that parents, schools, and governments are struggling to contend with. When defaic technology first came on the scene around 2015,

it required hundreds or thousands of photos. This meant that the people who were vulnerable were famous. But now a growing number of Nudify apps can virtually remove clothing from a person based on just one image. and it only takes seconds. Experts told us that no one is safe from this type of harassment, but while people of all ages are falling victim to deepfakes, younger generations are encountering this type of bullying and harassment

during a really formative time in their social and sexual development. More than half of the teens who took a recent survey from George Mason University said that they had created at least one image using nudification tools, and one third of these respondents said someone had created, and shared a nude image without their permission. So this is clearly happening at a really large scale. Schools don't know how to handle this type of harassment. Many teenagers pointed out to me the irony that their schools often lack policies on deepfakes,

even as they tell students not to use AI for cheating. Really, it's falling on parents to try to help their children regain a sense of safety as they try to scrub these images from the internet. Google said it disabled. the search term Nudify in its App Store after an inquiry from the Wall Street Journal. Apple also recently disabled searches for the term. A spokesman for Google said the company doesn't allow apps that contain sexual content, and the company detects and removes apps with harmful content. As part of a broader investigation into deepfakes, Google has suspended hundreds of apps. A spokesman

for Apple said the company's app store prohibits overtly sexual content and requires developers to have a method for filtering objectionable user-generated content. The Apple spokesman said the company removes notification apps, which are against the company's guidelines. That was journal tech reporter Georgia Wells. As far as regulation, the federal government began enforcing the Take It Down Act last month, which made it a federal crime to knowingly publish or threaten to publish non-consensual intimate images, including ones created by AI.

The law requires platforms to remove content within, 48 hours of being notified by a victim. Some states also criminalize deep-fake nudes, while the European Union is looking to ban nudify apps outright. And finally, to the World Cup, where Iran is making headlines off the pitch. Iran began its World Cup Monday night with a two-to-two draw against New Zealand, but its personnel said problems stemming from the war with the U.S. are affecting the team. That's sports reporter Andrew Beeden, who said the team faced issues before landing states.

side when their training base was moved to Mexico from the U.S. because of security concerns, but that was just the beginning. After the match, Starstriker Medi Terremi said the team had to leave back for the team's base camp in Mexico immediately, rather than spending the night in the Los Angeles area and properly recovering. He brought up other issues as well, including staff that hadn't been granted visas, and he said the players brought up these concerns with FIFA President Gianni and Fantino when he visited the team's dressing room.

Altogether is the product of an unprecedented situation in which the host nation of a World Cup is at war with one of the participating countries. Iran's next two games are against Belgium and Egypt, with both being played in the U.S. And that's it for What's News for this Tuesday morning. Today's show was produced by Daniel Bach and Hattie Moyer with help from Julia Nasser. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening. listening.