U.S. Says It Has ‘Makings of a Deal’ With Iran

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0:18Treasury Secretary Scott Bessent says the U.S. and Iran are close to a deal to end the war. Plus, why a tiny Baltic nation is training its citizens for a possible military crisis. Estonian officials say, is this is all, in a way, a deterrent, signaling to Russia constantly that you are ready for any sort of military incursion? And move over, pied-a-terre. The med-a-terre is all the rage in New York City real estate. It's Thursday, May 28th. I'm Alex Osilev 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.

1:01Treasury Secretary Scott Besant told reporters today that the U.S. and Iran are within reach of an agreement to wind down the war. That we perhaps have the makings of a deal here. Besant said the president has yet to sign off on it, however. Again, everything depends on what the president wants to do. And President Trump is not going to make a bad deal for the American people. Besant said Iran must agree to dispose of its highly enriched uranium. He said the country must commit to never seek a nuclear weapon, and Iran needs to fully reopen the Strait of Hormuz. Iran, meanwhile, has signaled that a final text of the agreement isn't ready.

1:40If it happens, the deal would be the first phase of a framework. The U.S. and Iran would continue to negotiate for another two months or more. In corporate news, a$72 billion railroad merger has hit a major snag. A federal regulator said today that it was pushing pause on its review of the deal between Union Pacific and Norfolk Southern. The regulator says it needs more information. That puts the timeline for the deal in danger. A Union Pacific spokeswoman said the company is still confident that the board will make a ruling in the middle of next year, the same timetable that the railroad had projected earlier.

2:17In Spain, an update on the Mango case. The billionaire founder of the fashion chain died in 2024 during a hiking trip with his son. Spanish authorities last week accused the son, Jonathan Andik, of being, quote, criminally responsible for his father's death. Andik is pushing back against those allegations. In a court filing today, he says that his father's fatal fall was likely the result of a knee problem. The filing also said there were no disagreements between father and son for almost a year before the death. And Albert Manifold, BP's chairman, who was fired earlier this week, hit back at what he described as lies about his behavior.

2:54Manifold said today that he accepted the board's decision to remove him, but he does not accept, quote, that lies can be told about me. The Journal has reported that BP received whistleblower reports that Manifold was bullying and verbally abusive towards staff. BP said today that it stands by its characterization of Manifold's behavior as unacceptable.

3:16Staying with the energy industry, after the ouster of Nicolas Maduro in January, President Trump encouraged U.S. oil majors to go into Venezuela. One of those companies was ExxonMobil. At the time, its CEO Darren Woods was not very enthusiastic. Here's what he said at a meeting with President Trump and oil and gas executives almost a week after Maduro was captured by the U.S. If we look at the legal and commercial constructs and frameworks in place today in Venezuela, today it's uninvestable. Now, though, Exxon may be changing its tune. On Exxon's most recent earnings call on May 1st, Wood said there were wide-ranging efforts to make Venezuela into, quote, attractive investment opportunities.

3:56Venezuela is a huge resource that's now opened up more freely to the world. There are continuing work going on with the industry, with the Trump administration, with the government of Venezuela. The journal has learned that Exxon is in talks with Venezuelan officials about returning to the oil-rich country. That would be its first time operating there in 19 years. But many of the challenges that have long prevented American companies from investing in Venezuela are still there. Colin Eaton covers U.S. oil companies for WSJ and joins us now from Houston. Colin, where do these discussions stand between Exxon and the Venezuelan government?

4:33So they're in negotiations, but there are all of these outstanding issues that need to be ironed out. It's still not totally clear what the government take in some of these contracts will be in terms of royalties, in terms of taxes. Companies like Exxon are also looking at the infrastructure in Venezuela. There's power shortages. There are challenges with their roads. And some of the equipment that Exxon had used previously have sustained heavy damage over the past 20 years or so. Oil wells across Venezuela have fallen into disrepair after years of mismanagement. And they would have to spend a lot of capital up front in order to get things going again.

5:15And we should note that when you reached out to Exxon for this story, the company declined to comment. But still, what you've laid out here are some pretty significant hurdles. Does it seem like Exxon will persevere in Venezuela anyway? Like, why might it be important for the company to be there? It has heavy crude that is preferred by U.S. Gulf Coast refiners. But also, these companies have been arguing for the past decade that oil and gas is going to continue to remain a big part of the global economy. And this is a place where there's a lot of oil to be drawn for many years. That was WSJ reporter Colin Eaton.

5:49Thanks so much, Colin. Thanks. Coming up, how do you keep Putin away from your borders? Estonia thinks it's figured it out. That's after the break. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM.

6:35There's some layers of economic data for investors to digest today. First, the Personal Consumption Expenditures Price Index, that's the Fed's preferred inflation gauge, rose 0.4 % in April from the month before. That's a bit less than the previous month, which is a good sign. But from the year before, it rose 3.8%. The Fed aims for PCE inflation of 2%. The Commerce Department also revised its estimate for GDP growth for the first quarter, saying the U.S. economy grew more slightly than previously thought. Bond yields paired earlier gains after the release of the data. In bonds, investors' appetite for short-term bond funds is the highest it's ever been.

7:14According to Morningstar, ultra-short bond funds, which typically mature in less than a year, posted their largest monthly inflows in March. Journal Markets reporter Jack Pitcher says that's a reflection of investors' skittishness around inflation. People are certainly more concerned about inflation right now than they were at the start of the year. We're seeing that show up in bond markets and we're seeing people favor short-term funds in part because they're stable. In exchange for that relative price safety, people are getting less returns on their money over the next year. Fixed income in general is supposed to play the safer role in people's portfolios and they're okay with that trade-off.

7:53But right now, investors are averse to buying long-term bonds. They're afraid that returns on those are going to get hurt by inflation. And when demand for bonds goes down, yields go up on new bonds. And ultimately, that leads to higher borrowing costs for companies, for the U.S. government, and that can reverberate throughout the economy. Meanwhile, major U.S. stock indexes today rose on hopes that a deal with Iran is in reach. The Nasdaq led the gains and ended up 0.9 percent. In news from the Trump administration, it's reached a deal with Kenya to establish a quarantine facility for Americans exposed to Ebola.

8:31The 50-bed unit, which will be located at the Laikipia airbase, will be operational starting tomorrow. The arrangement has drawn opposition from Kenyan medical groups. The embassy of Kenya in Washington and Kenyan officials didn't immediately respond to a request for comment. And across the Baltic country of Estonia, preparing for potential war has become a part of everyday life. That might seem a little strange for a country that's not currently at war. But WSJ national security reporter Robbie Grammer says the drills and other preparations are an effort to deter Russian leader Vladimir Putin.

9:07Every official we've spoken to in NATO, in Eastern Europe, in the Baltic region, assesses that Putin's ambitions are not going to start and end in Ukraine. His ambitions are effectively to create a new buffer zone, a region where Russia has influence, and Baltic states are in the crosshairs here. Estonia has plans to be one of the highest defense spenders per capita of GDP among any NATO allies by the end of the decade, spending around 5.4 % of their GDP on defense. And that's a type of pattern that you were seeing from a lot of the Eastern European allies here, including Poland, including Romania, including those that border Ukraine or Russia, in a way that you haven't seen among Western allies.

9:57Robbie spoke with officials during his recent trip to Estonia's eastern border. Estonia is preparing for war, but war isn't imminent and it's not inevitable. And local and national governments are preparing in a very sort of routine matter of fact way for potential military contingencies. So when I was in Tartu, a city in eastern Estonia, the city planners there were effectively conducting exercises to simulate military attacks. They're hoping to have shelters for up to 100 ,000 people in the event of an emergency by 2028. They are working through training for everyone from kindergarten directors to city mayors for what happens in the event of a military crisis, how they coordinate with Estonia's military forces, how they would coordinate with NATO, how they would keep civilians safe.

10:54and the national government is really stepping up its defense spending and its coordination with other NATO alex including the United Kingdom including France to help get the country ready for the possibility of war and what a lot of Estonian officials say is this is all in a way a deterrent signaling to Russia constantly that you are ready for any sort of military incursion. And finally, there's been a lot of noise lately in New York City around the pied-a-terre, people's fancy second homes here, which state lawmakers passed a law yesterday to tax. Well, real estate experts say there's a new kind of property that's becoming popular.

11:38Call it the med-a-terre. That is, a property where people who left the city to retire can come back for doctor's visits. Jessica Flint covers residential real estate for the journal and says this is a lifestyle play. So it gives you access to everything in New York, including your doctors. You know, while warm, sunny beaches beckon, they just can't really replicate those relationships that they've had with their medical institutions for so long. So they want to have a foothold in an area where they can have that access. The Upper East Side has a lot of medical density. So that is a prime target.

12:11The price range is usually kind of between 2 million and 5 million, extending up to 10 million. and they're looking for really highly serviced buildings, a lot of concierge service that just allow them the ease of being able to come and go. But Jessica says it's not just New York City that attracts the Mediterre crowd. Minneapolis also has its fair share because it's a 90-minute drive from the Mayo Clinic. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bansi and Danny Lewis with supervising producer Tali Arbel. I'm Alex Osola for The Wall Street Journal.

12:44We'll be back with a new show tomorrow morning. Thanks for listening.

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