I’ve seen that error message asked a lot here, but no universal solution except to disconnect the interface and restart computer, open Wavelab and play through internal, then re-connect interface and restart computer, switch back to the external interface in Options Audio Streaming Settings, and toggle settings in the interface control panel for internal/auto clock and sample rate settings, and file format sample rate in the Record Window. And update to the latest iConnect interface software and/or firmware.
But it would probably be a good idea to disconnect the interface and try to record with the computer built in microphone or line-in first to see if that works (even with no input) without the error message. I don’t think High Sierra is fully supported in even Wavelab 9 yet, but getting it to record with the computer built-in audio would probably be a good sign for the Wavelab 7.
edit: sorry I guess it is 10.14 not fully supported on Wavelab 9 yet.