‘Unconditional surrender,’ US options in Iran and the Fed
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Today, the Fed keeps rates steady but says it's a rocky time ahead. The U.S. Supreme Court upholds a state ban on transgender care. Trump considers a possible U.S. strike against Iran as he calls for unconditional surrender. An attack on people lining up for food kills dozens in Gaza.

It's Wednesday, June 18th. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes every weekday. I'm Kim Bunnell in Whanganui, New Zealand. And I'm Jonah Green in New York. She's made up her mind, lived pretty smart. Learned to budget responsibly right from the start. She spends a little less and puts more into savings. Keeps her blood pressure low and credit scoring.

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The Federal Reserve is holding interest rates steady. Policymakers have signaled that borrowing costs are likely to fall this year, but at a slower pace, given higher inflation expectations from U.S. President Donald Trump's tariffs. Here's Fed Chair Jerome Powell. Increases in tariffs this year...

are likely to push up prices and weigh on economic activity. Ahead of the Fed's decision, Trump at a press conference announcing a new flagpole at the White House. And these are the best polls anywhere in the country, or in the world, actually. Ripped into the Fed chair. So we have a stupid person, frankly, at the Fed. He's done a poor job. Too late. I call him too late, pal, because he's always too late. Reporter Howard Schneider has the details on what factors the central bank is weighing.

The economy seems to be softening a bit, though not dramatically so. The job growth is still pretty solid through May. Some weak retail sales, some weak industrial production. I had it all up, and they don't still have the clarity of a quickly slowing economy or a fast rise in inflation that they say they need to give clear guidance on what's coming next for interest rates and when. So no hike, no cut.

They're going to stay put. Now, we've got an episode of Reuters' Econ World podcast out on this very topic later today, but we're in this environment of uncertainty and volatility that's yet to really show up in the economic data in a meaningful way. Does that just create an environment for waiting and seeing for an extended period?

It's one of those slowly-then-all-at-once sort of situations, potentially, as they say. Look over the last five days, four days, you've now got this intense missile exchange between Israel and Iran. You've got the president now telling the leader there, we know where you are. So what does that mean? You're going to wake up tomorrow with oil spiking to $80 or $90 a barrel? Or is it all going to settle back because everybody took a deep breath and it stopped?

It's not an OPEC world like it used to be. But geopolitically, strategically, Straits of Hormuz, Red Sea, Indian Ocean, you know, if any of that gets gummed up like it could, then you're going to talk about a different round of impacts that the Fed might have to consider.

The U.S. Supreme Court is upholding a ban on medical care for transgender youth in Tennessee. In a 6-3 ruling, the justices decided that the ban does not violate the Constitution's 14th Amendment promise of equal protection. The ruling could deal a blow to efforts by states to defend other measures targeting transgender people.

Iran's supreme leader is warning of serious consequences if the U.S. strikes Iran. In a speech aired on television, Ayatollah Ali Khamenei said that Iran will not surrender. His comments come after Trump demanded Iran's unconditional surrender. That means I've had it. Okay, I've had it. I give up. No more.

Then we go blow up all the nuclear stuff that's all over the place there. Though Trump declined to say whether he had made any decision to join Israel's strikes against Iran. I may do it, I may not do it. I mean, nobody knows what I'm going to do. I can tell you this, that Iran's got a lot of trouble. It comes as Israel and Iran continue to trade attacks. Missiles were seen streaking across the sky in the West Bank and Tel Aviv.

While Iranian news outlets are reporting Israel attacked a university linked to the country's Revolutionary Guards and a ballistic missile facility near Tehran.

The U.S. is deploying more fighter aircraft to the region, according to three U.S. officials. And a source with access to U.S. intelligence reports says Iran has moved some ballistic missile launches, but that it's difficult to tell if they're targeting U.S. forces or Israel. Steve Holland is covering the story. Steve, what might a direct strike from the U.S. look like?

One option that the president has is to launch a bunker buster bomb that would be able to penetrate deep underground in Iran. At the Fordow uranium enrichment site, it is located deep underground.

There has to be a capability to take it out. But the bunker buster bomb is one of the tools that's possible. Now, whether Trump will agree to this is unclear. It's something that the Israelis have asked for. But the Israelis have also talked about using their own weaponry to cause enough damage to block the entrance to this facility. What other options is the U.S. weighing?

There's also an option that the United States would help refuel Israeli jets that launched the attacks. That would give a step of separation between Iran and the United States. It would give...

some ability for the United States to say it's not directly involved in the conflict. President Trump started out calling for diplomacy and for Iran to have a chance to come to the table. That has changed now with him talking about unconditional surrender. What should we make of that change?

One of the things to consider is that Trump has been all about diplomacy. He's been urging Iran to come to the table that the one thing he just will not allow is Iran to have a nuclear weapon. The other day, the Supreme Leader of Iran said, there's no way we're giving up enrichment. That was a sign to Trump that, hey, they're just not serious about coming to the table. So maybe it's time to consider other options.

Iran denies seeking nuclear weapons and has pointed to its right to nuclear technology for peaceful purposes as a party to the International Non-Proliferation Treaty.

Israeli attacks have killed 140 people in Gaza in the past 24 hours. That's according to local health officials. The deaths include the latest in nearly daily killings of Palestinians seeking food and aid. We are waiting for you.

Moyad Kudas says his children are starving, so when he heard there was a delivery of flour, he went to wait. Then, according to witnesses, Israeli tanks began to fire. It's one of the single most bloody incidents so far in mounting violence as desperate residents struggle for food.

The Israeli military, at war with Hamas-led Palestinian militants in Gaza since October 2023, has acknowledged IDF firing in the area and says it's looking into the incident. L.A.'s curfew has been lifted. Mayor Karen Bass ended the restrictions on part of downtown, put in place to curb crime in the wake of immigration raids and protests. President Trump is set to extend the deadline to keep TikTok up and running in the U.S.,

Chinese-based ByteDance had until tomorrow to divest U.S. assets. The White House says Trump will sign an executive order, pushing the deadline to mid-September. Prominent podcasters like Joe Rogan and AI chatbots are playing an increasingly significant role in the distribution of news in the U.S. That's according to a report by the Reuters Institute for the Study of Journalism.

The report found that in the week following the 2025 US presidential inauguration, more Americans got their news from social and video networks than from TV and news websites for the first time.

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And for today's recommended read, the Trump administration has disbanded an interagency group whose mission was to pressure Russia into speeding up peace talks with Ukraine. The effort lost steam as it became clear that Trump was not interested in a more confrontational stance on Moscow. There's a link to that story in the pod description. For more on any of the stories from today, check out Reuters.com or the Reuters app.

Don't forget to follow us on your favorite podcast player, and we'll be back tomorrow with our daily headline show.