Iran Is Trying to Choke Off Traffic in the Strait of Hormuz

Summary

WSJ What’s News – PM Edition

Episode: Iran Is Trying to Choke Off Traffic in the Strait of Hormuz
Date: March 11, 2026
Host: Alex Osola
Primary Topics: Inflation update, Economic risks from new Middle East conflict, Closure of the Strait of Hormuz, U.S. military’s role, Political and business responses to affordability pressures.

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Episode Overview

This episode centers on the escalating crisis in the Strait of Hormuz and its global economic repercussions, particularly potential oil supply disruptions and price increases following recent U.S. and Israeli strikes on Iran. The hosts and expert guests also discuss the U.S. government and military response, implications for inflation, and the policy approaches from Washington and the private sector as the world grapples with the new uncertainty.

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Key Discussion Points & Insights

1. Inflation in Focus Amidst Escalating Conflict

• Labor Department Report: Consumer prices rose 2.4% in February year-on-year, matching January and economist expectations (00:44).
• Context: These figures came before the recent U.S. and Israeli attacks on Iran, making them a less reliable indicator going forward.
• Expert Insight:
  • Spencer Jacob, WSJ Investing Columnist, explains the limited usefulness of February’s inflation data given the conflict:

    “It's a bit like saying, you know, other than that, how did you like to play Mrs. Lincoln? I mean, there's a big, big thing that's happened since these numbers were compiled for February.” (01:39)

  • Potential Spillover: Conflict could drive not just energy prices higher, but also food prices via impacts on fertilizer supply and global transport.
  • Central Bank Response: Historically, central banks are hesitant to adjust monetary policy in direct response to commodity shocks unless recessionary effects strengthen (01:39–02:33).
  • Key Metrics To Watch: Gasoline prices, basic food prices (milk, bread), and their psychological impact on consumer confidence (02:42).

2. Strait of Hormuz: Strategic Chokepoint Under Fire

• Oil Market Shock:
  • IEA agrees to release 400 million barrels from emergency stockpiles in response (03:22).
  • Iran’s military spokesman:

    “...wouldn't let, quote, a single liter of oil pass through the strait for the benefit of the US and its allies.” (03:51)

  • Three commercial ships were hit near the strait today (03:41).
• U.S. Military Stance:
  • Despite President Trump stating oil companies should use the strait, the U.S. military is not providing escorts due to security risks (04:14).
  • Jared Malson, WSJ Middle East Correspondent:
    • The administration indicates willingness to escort ships “if necessary and when the conditions are right,” but that moment has not arrived (04:45).
    • Key reason: Ongoing Iranian missile, drone, and mine threats make the strait a “kill box.” U.S. personnel “would potentially only have seconds to respond” to an attack (05:49).

    • “If we send our people in there, they're going to be in the line of fire themselves. It's not safe for them either. So that's why they're not currently offering that to the oil or shipping industries.” (00:30, 06:02)

    • Only a ceasefire and “explicit assurances from the Iranians” can restore shipping safely (06:36).

3. Financial Markets & Business Responses

• Market Summary: U.S. stocks mixed; financial stocks down, S&P 500 slightly lower, tech up, Brent crude up nearly 5% (06:53).
• Listenership Engagement: Listeners are invited to share how volatile energy prices affect them (07:20).

4. U.S. Policy Responses to Economic Anxiety

• Democratic Proposals:
  • Senators Chris Van Hollen (MD) and Cory Booker (NJ) propose ending federal income taxes for low- and middle-income Americans and expanding deductions/credits (08:03).
    • Van Hollen: End federal income taxes for individuals making <$46,000 or couples <$92,000
    • Booker: Double the standard deduction; increase child and earned income tax credits
  • WSJ Tax Policy Reporter Richard Rubin:

    “We shouldn't sort of underestimate the power of simplicity. … It's a bumper sticker kind of thing.” (08:38)

  • Offsets: Both plans include raising corporate and high-earner taxes to pay for benefits, but intra-party debate continues over priorities (09:16).

5. Business Strategies for Affordability Perception

• McDonald’s: Rolling out $3-and-under value menu and $4 breakfast deals to maintain “affordability image” (10:03).
• Target: Activist-led boycott ending after company and stakeholders discuss the impact on Black community and sales (10:33).
  • Target has faced 13 straight quarters of soft sales, partly attributed to DEI policy controversies.

6. Other Political/Economic News

• Tariffs: Trump administration preparing more tariff investigations following a Supreme Court ruling limiting previous tariffs (11:00).
• Legal Reversals: Trump orders DOJ to resume defending sanctions on law firms, after internal friction over recent reversals (11:17).

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Notable Quotes & Memorable Moments

• Spencer Jacob on the CPI numbers’ sudden irrelevance:

  “It's a bit like saying, you know, other than that, how did you like to play Mrs. Lincoln?” (01:39)

• Jared Malson on the peril of possible Navy escorts:

  “The US or allied Navy personnel that would be there would potentially only have seconds to respond to [missiles and drones]. One of the analysts … compared it to a kill box, essentially.” (05:49)

• Richard Rubin on the tax cut proposals:

  “We shouldn't sort of underestimate the power of simplicity … It's a bumper sticker kind of thing.” (08:38)

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Key Timestamps

• 00:44: Inflation numbers context; preview of coming economic pressure
• 01:39–02:33: Spencer Jacob explains why Fed won’t use monetary policy to counter commodity shocks
• 03:22: IEA’s emergency oil release; update on strait conditions
• 03:51: Iran’s uncompromising statement on oil passage
• 04:45–06:36: Jared Malson details why U.S. won’t escort ships; dangers; what’s needed to reopen strait
• 06:53: Market reaction summary; listener callout
• 08:03–10:03: Proposals for new tax cuts, offsets, and political context
• 10:03–10:33: McDonald's and Target’s responses to affordability/activism
• 11:00–11:17: New tariff investigations and DOJ legal reversals

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Tone & Style

• Analytical pragmatism: Focus on numbers, policy, risks, and market moves without alarmism.
• Authoritative, direct, and concise: Explanations are crisp and focused, delivered in the familiar, unhurried style of business news.

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This episode gives listeners a sharp, timely understanding of how the Hormuz crisis is shaping the global economy—from the pump to policymakers to the drive-thru—with expert voices clarifying why this chokepoint matters, what could resolve it, and how American leaders and business giants are recalibrating under intensifying financial pressure.

Transcript

[A]

Truestage companies simplify the complex with 90 years of delivering accessible insurance and innovative financial solutions. Let's work together and build a better tomorrow today. Learn [e-mail] WSJ Trustage is the marketing name for Trustage Financial Group. And get subsidiaries and affiliates. Corporate headquarters is located in Madison, Wisconsin. Inflation held steady in February, but the bigger question is what comes next? Plus, why the US Military isn't helping oil tankers get through the Strait of Hormuz.

[B]

What American defense officials are looking at is saying, like, if we send our people in there, they're going to be in the line of fire themselves. It's not safe for them either. So that's why they're not currently offering that to the oil or shipping industries.

[A]

And Democrats are pitching tax cuts for millions of Americans to try to win over voters. It's Wednesday, March 11th. I'm Alex Osola 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. A new report out today from the Labor Department showed that consumer prices rose 2.4% in February from a year earlier. That's the same pace as in January and pretty much what economists expected. But these numbers are from before the US And Israel attacked Iran. And the war threatens to raise a lot of prices. WSJ Investing columnist Spencer Jacob joins us now to discuss the question on everyone's mind. Just what can February's numbers tell us? Spencer, under normal circumstances, these numbers would have been a key reading on what prices are doing. How does the Middle east war change that?

[C]

Well, yes, it changes it a lot. It's a bit like saying, you know, other than that, how did you like to play Mrs. Lincoln? I mean, there's a big, big thing that's happened since these numbers were compiled for February. This war, if it lasts a long time, will have an impact not just on energy prices, but on food prices because it affects a lot of the world's fertilizer supp, a lot of just transport generally in the world. What does the Fed do when you have a big energy price shock? Well, they're kind of scarred by the memories of the 1970s when they tried to initially cut the economy back into health, which turned out to be a mistake. And really the answer central bankers have for this is to do nothing unless there's a very severe recession or the war creates other recessionary effects. They tend to not to try to use monetary policy to deal with a commodity price shock.

[A]

So as the conflict continues, what are some of the numbers that you're going to be keeping an eye on just to gauge a bit of the economic impact.

[C]

One thing to look at is what's happening in the real world to prices. For example, gasoline prices. Those are already up substantially and those have a big effect, especially on middle and working class households. You know, spend a lot of money on gasoline in the United States. But also psychologically, it's a price that everyone knows. It's a price everyone sees. You know, if the price of milk and bread and things like that start to go up as well, which they could, those are the ones that people get angry about and are aware of. And it affects their, their behavior in other ways. It affects their propensity to spend, for example.

[A]

That was WSJ investing columnist Spencer Jacob. Thanks, Spencer.

[C]

Thank you.

[A]

This morning we told you the International Energy Agency was proposing a record release of oil reserves to try to bring down crude prices. The IEA has now agreed to do so, and its member countries will release 400 million barrels of oil from emergency stockpiles. This is a major action aiming to alleviate the immediate impacts of the disruption in markets. But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of, of transit through the state of Hormuz. That was the IEA's executive director, Fatih Birol, speaking this morning. Meanwhile, the Strait of Hormuz, that critical shipping lane for the world's oil supply, is still effectively closed. Today, three commercial ships were hit around the strait. The spokesman for Iran's armed forces said the country wouldn't let, quote, a single liter of oil pass through the strait for the benefit of the US and its allies. President Trump said today that oil companies should use the strait. However, they're not likely to do so until it's safe. I'm joined now by WSJ Middle east correspondent Jared Mallison. Jared, the president suggested that there will be military escorts to help ships cross the strait. But the Journal's reporting that the US Military has turned down requests to escort ships through the strait. Why is that so?

[B]

The administration wants to calm the oil markets down. They're under a lot of pressure to do that right now because of the surge in oil prices. So the Trump administration has said it is prepared to offer military escorts for ships if necessary and when the conditions are right. The conditional phrases on that statement are very important here because what we understand from our reporting is that the Department of Defense and the military are not currently planning to escort any ships until it is safe to do that. The Iranians are attacking ships in the strait. And what we understand from our reporting from US Officials is that they do not want to send the Navy in to escort any ships as long as that is still a very real risk. Iran still has the capability to strike using missiles, drones to mine the strait. It's just very dangerous for any ships to go through there.

[A]

What are the conditions in the strait that make this so challenging?

[B]

So it's a very narrow strait. It's somewhere in the range of 24 miles wide, meaning the Iranian coast is very close by. And what one former Navy official told me is that when it comes to the missiles and drones that the Iranians could potentially fire, the US or allied Navy personnel that would be there would potentially only have seconds to respond to those. One of the analysts my colleagues spoke to compared it to a kill box, essentially. And so what American defense officials are looking at is saying like, if we send our people in there, they're going to be in the line of fire themselves. It's not safe for them either. So that's why they're not currently offering that to the oil or shipping industries.

[A]

What would it take to reopen the Strait?

[B]

What analysts have been telling me is that only a ceasefire, along with some kind of explicit assurances from the Iranians that they're going to stop shooting at these ships. That's the only thing that would really restore shipping through the strait.

[A]

That was WSJ reporter Jared Malson. Thanks, Jared.

[B]

Thank you.

[A]

U.S. stocks were mixed today. Financial shares fell, putting pressure on the dow, which dropped 0.6%. The S&P 500 ended slightly lower, while the NASDAQ ticked higher. Oil prices kept rising with Brent crude, the global benchmark, closing up nearly 5%. We want to know how volatile energy prices are affecting you or your business. Let us know by sending a voice note to wnpodsj.com or leave us a voicemail at 212-416-4328. Make sure to include your full name and location so we can use your comments on the show. Coming up, everyone from Democratic lawmakers to McDonald's is trying to win over people watching their wallets get into how they're doing it after the break. Outsystems is an outstanding way to quickly deploy apps and AI agents and deliver results. A top US bank deployed apps for customers to open new accounts, while a global brewer developed an app to automate tasks worldwide. Outsystems build your agentic future. Democrats are out of power and they're looking for Ways to get the attention of voters who are worried about their finances. So senators are coming up with plans that would get rid of federal income taxes for millions of people. Maryland Senator Chris Van Hollen is preparing a proposal to end income taxes for people making under $46,000 and married couples making under $92,000. And New Jersey Senator Cory Booker's pitch would more than double the standard deduction while increasing the child and earned income tax credits. WSJ tax policy reporter Richard Rubin says the plans are an effort to win over voters.

[D]

What Senator Booker and Senator Van Hollen are doing is trying to address the concern that lots of voters have about the cost of living. And they see a tax cut as a quick, easy to understand way to do it. We shouldn't sort of underestimate the power of simplicity. We saw in the 2024 campaign how President Trump talked about no tax on this, no tax on that. It's a bumper sticker kind of thing. And that's really kind of what they're aiming to do, is like this sort of mass big tax cut idea that's a little different from what we expect from Democrats.

[A]

Rich says that the senators are trying not to increase the budget deficit, which is expected to grow in the coming years.

[D]

So both the Booker and Van Hollen plans, they're designed so that there are tax increases that go along with the tax cuts. Booker is talking about higher corporate taxes and raising the top tax rates. Van Hollen's got a surtax on very high income people. Their idea is to pay for the things that they're doing. The challenge is this. Any dollar that Democrats are able to raise in new revenue to pay for this is a dollar that they can't use for other initiatives. So these proposals have generated some pushback from others in the party who are like, well, wait a minute, like, what should be first on our list when Democrats get to 2029? Their first chance to really be in control of everything again. What comes first for the party?

[A]

Speaking of affordability, we're exclusively reporting that Starting next month, McDonald's is planning to offer a new value menu of items costing $3 and less. It'll also have new $4 breakfast deals the fast food chain has been pushing for nearly two years to cement its affordability image. And a shopper boycott against Target that has hurt its sales may be ending. Last year, a group of activists encouraged shoppers to boycott Target after it backed away from some of its DEI policies. Now their official work on the boycott will end. The activists say that's because Target privately acknowledged a breakdown in trust with the black community. Target has reported 13 straight quarters of weak or falling quarterly sales. An executive said shoppers upset over DEI policy changes have played a role. A Target spokesman today said that the company is pleased to be moving forward. Last year, we reported a series about the boycott and its impact on Target's bottom line. We'll leave a link to that series in the show. Notes. The Journal has learned that the Trump administration is preparing to announce new tariff investigations over what it considers unfair trade practices. They could result in higher tariffs on a number of other countries. These tariffs are designed to replace the temporary 10% tariff imposed last month after the Supreme Court ruled that many of Trump's previous tariffs were ille. And we're exclusively reporting that President Trump ordered the Justice Department to reverse course on defending the White House's sanctions against law firms. The Wall Street Journal reported earlier this month that the department was dropping its defense of executive orders that outlined punishments against specific law firms. People familiar with the matter say that Trump said he didn't sign off on that and expressed displeasure with Justice Department leadership. White House Press Secretary Caroline Levitt said the president had confidence in Attorney General Pam Bondi and Deputy Attorney General to Blanche. And that's what's news for this Wednesday afternoon. Today's show is produced by Pierre Biennime with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Hi, I'm Kelly Cavagnaro, Managing Director, head of North America Institutional Distribution at Janice Hen Anderson Investors. We believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy. Your valued assets and our valuable insights. Your mission and our vision working in harmony to seek the right investment opportunities. Janice Henderson Investors Investing in a brighter future Together.