Diesel Price Surge Complicates Inflation Forecasts Ahead of Key Policy Meetings

Rising diesel prices are putting pressure on central banks as they prepare to release key inflation data. Diesel fuel costs have reached record levels, affecting industries such as shipping, farming, and manufacturing.

The Federal Reserve's upcoming policy meeting on September 16 is expected to be closely watched, with economists warning that a hot inflation reading could push interest rates higher. JPMorgan's Bruce Kasman projects core CPI will rise 0.21%, but notes that central banks worldwide are shifting towards action in response to the energy shock.

The European Central Bank is also expected to raise its deposit rate on Thursday, with futures pricing in a 75% chance of another hike by December. The recent surge in Asian technology stocks has been attributed to a Goldman Sachs forecast predicting the Kospi could climb another 75% to 12,000.