President Trump Exits G7 Early
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President Trump makes an early exit from a G7 summit in Canada, sitting out conversations on Ukraine and trade. Plus, the Senate proposes changes to the president's big, beautiful bill as it seeks to deliver the legislation by July 4th.

And the Fed convenes ahead of its next interest rate decision tomorrow. All of these central banks are kind of grappling with different problems at the moment. The Fed perhaps is the one for whom inflation and inflation expectations is the big question. It's Tuesday, June 17th. 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.

President Trump has departed a summit of G7 members in Canada a day early over growing tensions in the Middle East. After another night of fighting, Israel's military said it killed one of Iran's most senior military commanders just four days after he took the job from his predecessor, whom Israel also killed.

Meanwhile, Israel says that Iran launched another volley of missiles toward it this morning, triggering sirens in Tel Aviv and activating the country's missile defense systems.

Before leaving Canada, Trump and other G7 leaders signed a statement backing peace and stability in the Middle East and affirming Israel's right to defend itself. However, we report that Trump resisted a statement being prepared by Canada, calling for a diplomatic solution to the crisis.

On trade, Trump signed a bilateral trade deal with the U.K. that will see the U.S. roll back tariffs on British steel and automobiles in exchange for Britain agreeing to purchase Boeing jets and granting improved market access to American farmers. However, he didn't appear to make progress in trade talks with Canada, with the two sides leaving a meeting yesterday with a laundry list of differences.

His shortened visit also means that the leaders of India, Australia, South Africa, Brazil and South Korea will no longer have a chance for FaceTime with Trump ahead of a July 9th White House deadline to strike trade deals before the imposition of higher reciprocal tariffs.

Bojan Panczewski is the journal's chief European political correspondent, and I asked him what to make of Trump's unexpected departure. He did pretty much the same thing in 2018, the last time Canada hosted the G7. He basically left early and didn't even sign the communique. Now he did. He got the essential line in the communique that...

Iran must under no circumstances obtain a nuclear weapon. In terms of the second day of the summit, that was obviously the day where they were going to discuss the tariffs, trade and Ukraine. And these are subjects that he wasn't necessarily keen to discuss. That's his approach to put leaders under pressure in order to give him a good deal, as he would put it.

So it was kind of beneficial for him to leave and not engage in these kind of multilateral discussions. He seems to have taken meetings with the leaders he wanted to talk to. So in that sense, it seems like it's a kind of typical President Trump performance in a forum like this.

And as for why Trump flew back to Washington, Boyan said we're still trying to figure that out. When he left, President Emmanuel Macron of France suggested publicly that Trump is going back home to draft some sort of negotiation strategy.

with Iran and then President Trump slapped him down on his social network truth and said that Emmanuel Macron was wrong as usual and that actually he was doing something much bigger than that quote. So we don't quite know what that is. I mean, some analysts have been speculating that he might decide to give some US assets

to Israel to bombard the nuclear facilities that Israel can't hit with its own assets. Basically, they need bigger bombs and bigger airplanes, and that's what the U.S. Air Force has got. Speculation is rife what the reason actually was, but he claims it was much bigger than that.

Meanwhile, Trump's return to Washington will see him miss a scheduled meeting with Ukrainian President Volodymyr Zelensky. Overnight, Kyiv was hit by a combined missile and drone attack, killing at least 14 people and wounding dozens more in what Zelensky has called one of the most horrific attacks on the capital since the war began.

Journal-Brussels correspondent Kim McRaehl is at the G7 summit, where Zelensky had hoped to build momentum for tougher sanctions on Russia. He and his allies argue that anything that restricts Russia's revenues will damage its ability to continue fighting and make a ceasefire more likely. Trump suggested on Monday before he left that he wasn't eager to tighten sanctions. He said sanctions cost the U.S. a lot of money and they aren't that easy.

Europeans have been talking about further sanctions, including lowering an existing price cap on Russian oil. But that could be difficult without U.S. support. It could also be difficult to convince European member states to go ahead with it after oil prices rose in recent days. And back in Washington, Senate Republicans hoping to deliver a tax and spending bill to the president by July 4th have proposed a range of revisions to the bill that passed the House last month.

Among the changes, the Senate would make permanent certain Medicaid cuts and several business tax credits that the House bill would only extend temporarily.

Clean energy tax credits would get a longer runway before being phased out. And in a move that's already stirred frustration in the House, the Senate will stick with a current $10,000 cap on deductions for state and local taxes, down from a $40,000 SALT cap included in the House bill in order to win support from some blue state Republicans.

And for more on those and other proposed changes touching on charitable donations, child tax credits, health savings accounts, and more, check out the link we've left in our show notes. Coming up, we'll preview the Federal Reserve's policy meeting, which kicks off today, and look at new data from Microsoft on what is fast becoming a new normal at work, logging on late into the night. Those stories and more after the break. ♪

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The Federal Reserve kicks off a two-day meeting today, at the conclusion of which it's widely expected to extend its wait-and-see posture on interest rates. While there are good reasons to think the Fed would be preparing to cut interest rates this week due to recent improvements in inflation, Deputy Finance Editor Quentin Webb says officials are likely to remain in the holding pattern. So the Fed is seen as vanishingly unlikely to cut rates tomorrow. If you look at market pricing, there's almost no chance.

of a cut in rates. And the reason the Fed is reluctant to cut rates right now is because although inflation seems to be coming closer to its 2% target,

We still don't really know what the sort of ultimate result of this trade and tariff blitz from the Trump administration will be. And so until we have a kind of clearer view on that, the Fed needs to work out where things are headed before it takes another move. And as Quinton explains, one of the issues for the Fed is how they're dealing with inflation expectations over actual data. So when we think about central banks and inflation, there are two very important things. One is inflation.

right now, so how fast the price is actually rising, and the second is inflation expectations. So where do people think inflation

prices are headed in the future. And that's important because those expectations can be self-fulfilling. So if households and businesses expect prices to rise, they might try and head off those rises by asking for a pay rise now or putting the prices in their stores up now. And so that tends to become reality. Now, for the past few decades, not only was inflation low, but consumers had a lot of confidence that it would stay low. And so that helped keep a lid on prices.

But the pandemic may have scrambled that because obviously we saw some very rapid inflation. And so the question is whether any price shock that we see from tariffs will be a one-off or whether that will start a new kind of inflationary spiral. Ahead of the Fed action, or inaction as it may be, the Bank of Japan left its policy rate unchanged this morning at 0.5%.

The BOJ last hiked rates in January and has since been assessing how the Japanese economy weathers the impact of tariffs on its outsized automotive sector. We are exclusively reporting that tensions between OpenAI and Microsoft are escalating amid OpenAI's push to loosen Microsoft's control over its products and win approval for a for-profit pivot.

The tech titans are also at a standoff over the terms of the startup's $3 billion acquisition of the coding startup Windsurf. Talks have grown so tense that OpenAI is reportedly considering a so-called nuclear option, accusing Microsoft of anti-competitive behavior and possibly seeking federal intervention.

That would mark a stunning shift in what had been one of Silicon Valley's most celebrated partnerships. OpenAI has a content licensing deal with The Wall Street Journal's parent company, News Corp.

Japanese conglomerate Mitsubishi is in advanced talks to buy U.S. gas producer Athon Energy's assets in a deal valued at around $8 billion. According to people familiar with the matter, Mitsubishi would acquire natural gas fields, pipelines, and other assets that Athon owns in the Haynesville Shale, a giant site that straddles east Texas and northwest Louisiana.

The deal comes as recovering natural gas prices and rising LNG exports have sparked a growing interest in the sector.

And confirming a trend that some of you may already suspect, new data from Microsoft indicates that late-night work is becoming the new normal. While the pandemic popularized flexible schedules and remote work, data on the activity of millions of workers who use the company's business applications shows that evening meetings and emails are increasing, with nearly a third of workers now logging on after 10 p.m.

As a result of the digital overload, job review site Glassdoor says they're seeing a marked rise in the number of employees complaining of burnout. And that's it for What's News for this Tuesday morning. Today's show was produced by Pierce Lynch and Kate Bullivant. Our supervising producer was Sandra Kilhoff. And I'm Luke Vargas for The Wall Street Journal. We will be back with a new show tonight when you evidently may still be working. Until then, thanks for listening.

Isn't home where we all want to be? Reba here for Realtor.com, the pro's number one most trusted app. Finding a home is like dating. You're searching for the one. With over 500,000 new listings every month, you can find the one today.

Download the Realtor.com app because you're nearly home. Make it real with Realtor.com.