​Iran Slows Its Missile Launches as Israel Dominates Air Space
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It's how our people make the difference every day. KPMG, make the difference. Learn more at www.kpmg.us. Iran says it won't surrender, even as it's launching fewer missiles at Israel. Plus, the Fed holds rates steady but keeps the door open to cuts later this year.

And why the biggest companies in the U.S. are reducing their headcount. It's such a shift from even a few years ago in the pandemic when a lot of companies were doing things what we would call talent hoarding, where they'd hire people even when they didn't have a job for them. Now it's like you do not add headcount. It's Wednesday, June 18th. I'm Alex Sosola for The Wall Street Journal. This is the PM edition of What's News? The top headlines and business stories that move the world today. What's News?

First up on today's show is the latest on the conflict between Iran and Israel. President Trump told reporters that he doesn't want to get involved in a conflict with Iran, but that he was concerned that the country was close to developing a nuclear weapon and that he thinks Iran would use it. The president has been noncommittal about whether to strike Iran's nuclear facilities, saying, quote, I may do it. I may not do it.

Trump also said Iran wants to negotiate over its nuclear ambitions, but suggested the country's leaders had waited too long to make a deal. The U.S. military has built up forces in the Middle East in recent days. While the Pentagon said the military buildup is purely defensive, it better positions the U.S. should Trump decide to join Israeli attacks on Iran. It could also be a tactic to pressure Iran or force it to make concessions.

Iran issued a defiant response to President Trump today, saying it does not negotiate under duress. Earlier in the day, Iran's Supreme Leader Ayatollah Ali Khamenei said that his country won't surrender and that any U.S. military intervention would bring irreparable consequences.

Israel's dominance over Iranian skies means that Iran is firing fewer missiles at Israel each day. But concerns remain that Tehran is preserving its stockpile. For more on the military conflict, I'm joined now by WSJ correspondent Dov Lieber speaking to us from Israel. Dov, as I just mentioned, fewer Iranian missiles have reached Israel in the past few days. What are the reasons behind that slowdown? Israeli officials and security analysts give a number of reasons.

One is that since this conflict broke out, Israel has been targeting Iran's missile launchers. Iran has far fewer launchers than it does have missiles. So this is a bottleneck in the system. The other reason is Israel says it has full control over the skies of Iran.

That means Israeli pilots can look down into Iran and look for Iranians about to shoot missiles. You know, there are certain signs when that's going to happen. The satellites can see it, the Israeli pilots can see it, and then they can strike those missiles on the ground before they're ever launched. And Israel has killed a number of senior military officials and mid-level commanders, and this harms the command and control capabilities of Iran, and this also makes it harder to have large coordinated attacks.

And the last thing is Iran's military is now dipping into its missile arsenals

the types of missiles that just take longer to set up and shoot. And this gives Israeli pilots more time to spot them and destroy them before they ever leave the ground. So that's another reason. And it's also another indication that Iran is truly losing its full capability of shooting missiles as it had on the first day. And I'll give you an example. On the first 24 hours, Iran fired around 200 ballistic missiles at Israel, and that was in four different barrages. On Tuesday, it fired around a total of 60 missiles, and that was between eight different barrages.

Each barrage has fewer missiles in it. And that makes it a lot easier for Israeli air defenses to intercept those missiles. Do we have a sense of whether Iran's military capability now is depleted or if they're just sort of pivoting to different types of armaments? What experts here say is that

Iran will likely pivot to using its most advanced missiles, these hypersonic missiles that are super fast and have the ability to maneuver as they get closer to the target. And this makes it much more difficult for Israeli defenses to intercept. And one thing that's important to note here is that Israel doesn't yet have in its array of air defense systems one that's specifically for hypersonic missiles. And that means there's a real vulnerability here.

Where might the conflict go from here if Iran is unwilling to make concessions? We're going to a place where Iran could drag Israel into a war of attrition, where they fire several missiles a day or something like that. And this could still be a very, very difficult situation for Israel. So Israel definitely has the advantage, but the ballgame is not over, not even close. That was WSJ correspondent Dov Lieber. Thank you, Dov. Thank you.

Federal Reserve officials agreed to hold rates steady today, but they left the door open to cutting interest rates in the second half of the year. President Trump preemptively blasted the widely anticipated rate decision earlier in the day and called for much more dramatic rate cuts.

To resume rate cuts that they started last year, Fed officials likely need to see either labor markets soften or stronger evidence that price increases due to tariffs will be relatively muted. The Fed released its first economic projections since Trump's large Liberation Day tariff announcements on April 2nd. They show that officials expect inflation and unemployment to rise this year by more than they projected in March.

Fed Chair Jerome Powell mentioned the higher inflation expectations in his remarks after the central bank's decision was announced. The thing that every forecaster, every outside forecaster and the Fed is saying is that we expect a meaningful amount of inflation to arrive in coming months. And we have to take that into account. WSJ Chief Economics Correspondent Nick Timoros joins me now. Nick, what are some of the factors that the Fed has considered going into this most recent decision?

Well, the big questions for the Fed are what's happening in the labor market and what's happening to inflation. And over the last few months, the picture on inflation has gotten better. And the labor market looks about the same as it did, maybe just a touch softer.

The issue, of course, what's going to happen with prices because of tariffs. So the fact that inflation has been getting better, normally that would be enough to get the Fed to consider cutting here. But because they're worried that prices might start going up this summer, it's frozen them in place. And they're now waiting to see what happens first. Does the labor market crack?

Or do we get this tariff inflation that forces the Fed to stay on hold for even longer? President Trump has, of course, been pressuring the Fed to cut rates. Has that played a role here?

It hasn't. The president did this in his first term, and I think after a while, everybody sort of got used to it. The president wants lower interest rates. He's arguing that there is no inflation. And there are other people who are making the same point, that the Fed doesn't have to worry so much about inflation.

But the arguments that you hear from those people, it really goes along these lines. Inflation isn't going to happen here because tariffs are bad for the economy. They hurt growth. They squeeze corporate profit margins. As profits decline, companies will lay people off.

and you get a recession. And so the Fed needs to be more worried about the recession risks coming from all this tariff uncertainty than they need to about inflation. Of course, that's not the argument that Donald Trump is making. He's arguing that the economy is strong, and it would be even stronger if the overnight cost of money was lower. That was WSJ Chief Economics Correspondent Nick Timorose. Thank you, Nick. Thanks for having me.

U.S. stocks paired gains today as Powell spoke about the Fed's decision, ending the session narrowly mixed. The Dow fell 0.1 percent, the Nasdaq rose about 0.1 percent, and the S&P 500 stayed flat. Oil prices were flat a day after settling at their highest since January.

The U.S. Supreme Court has upheld a Tennessee law barring gender transition treatments for minors, rejecting claims that the ban amounts to sex discrimination. The decision, which broke six to three along ideological lines, was the latest setback for transgender rights. The Trump administration has targeted transgender rights in policies that range from expelling transgender personnel from the military to halting funding for the University of Pennsylvania because it had a transgender female on its women's swim team.

Coming up, why thriving companies are cutting workers. That's after the break.

In the past, when a company added employees to its workforce, it was a sign that the company was thriving, that sales were surging, that they were confident about the future. Now, a growing workforce is a sign that a company is doing something wrong. According to employment data provider Live Data Technologies, U.S. public companies have reduced their white-collar workforces by a collective 3.5% over the past three years.

Companies like Walmart, Bank of America, and General Motors have all shrunk their headcount in recent years. The journal's Chip Cutter reports that the cuts go beyond typical cost trimming and speak to a broader shift in philosophy. And he joins me now with more. Chip, what is at the heart of this philosophy? Well, I think it's

sort of a new calculus, a new thinking that fewer employees actually means faster growth. A lot of executives are now kind of coming around to the idea that having too many employees might be an impediment. A lot of bosses are saying, what if we were smaller? What if we shrunk? Could this actually be more helpful to us? I

I think companies have seen what startups are able to do now with very few employees. That's a factor, too. I mean, obviously, AI is the center of all this. And bosses just see the potential of this technology, even if it's not fully realized, and just think, couldn't our company be a little bit smaller?

And it's such a shift from even a few years ago in the pandemic when a lot of companies were doing things what we would call talent hoarding, where they'd hire people even when they didn't have a job for them. Now it's like you do not add headcount. Prove to us that the AI can't do this job. Is there something to this idea that generally things are also happening more quickly and that the staff needs to be kind of more nimble, be able to pivot? Definitely. Yeah.

You think about what Procter & Gamble recently did. They announced earlier this month they would cut 7,000 jobs. That's about 15% of its non-manufacturing workforce. And the idea there was to create broader roles and smaller teams. So they want to make sure that people in these jobs feel like they have a big, impactful role and that they're on teams where they can get things done. And you see this mentioned from Amazon CEO Andy Jassy, too, where he has told people at the company earlier this year, you don't need 50 people on every project.

Great leaders are able to operate with, in his words, not a lot of resources. They're able to just sort of be scrappy and get things done. And I think that ethos is just trickling through so many different companies right now. And, of course, that may not mean great things for workers inside these companies trying to figure out how they balance all their different responsibilities. You know, Chip, in the past, usually companies would let go of workers in recessions and staff up when the economy picks up. Is that...

Hiring cycle no longer tied to the economy in that way then? It almost feels like it. It feels deeper. That it's kind of turning this usual cycle on its head. I mean, if you think about it, corporate profits rose to a record high at the end of last year. That was according to the Federal Reserve Bank of St. Louis. I mean, they're navigating really difficult forces on tariffs and geopolitics and all of that right now.

Companies are doing fine, but I think they feel like even with all of this, the answer is not adding more people to grow. The idea is that you can still grow. You can reach all these lofty targets without having to actually add more headcount. Are there certain kinds of positions that are being more affected by this trend?

It really is, first off, the white-collar jobs, jobs in marketing and human resources and law. I mean, we're starting to see the effects of sort of AI in some of these positions. But it's also, important note, it's still early on all this, too. And so the effects could be even more drastic in years to come. That was WSJ reporter Chip Cutter. Chip, thanks as always. Thanks for having me.

And that's what's news for this Wednesday afternoon. Today's show is produced by Pierre Bien-Aimé and Anthony Bansi. Our supervising producer was Matthew Walls. I'm Alex Osola for The Wall Street Journal. We're off tomorrow for the Juneteenth holiday, but we'll be back with a new show Friday morning. Thanks for listening.

Thank you.

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