As investors hope for an optimistic report from the Labor Department on October 8, the markets remain volatile on concerns that inflation may be a longer-term issue than central banks initially predicted, especially as global energy sizes weaken. To learn more about the energy supply’s potential impacts on inflation, the Bloomberg Terminal turned to Axonic Capital Director of Research Peter Cecchini for insight.
“With a global energy supply problem looming into the winter months, inflation is likely to broaden, especially because natural gas is a key in plastic manufacture,” Cecchini explained to the publication. “After years of going nowhere fast, natural gas prices are the highest since 2008. The big question: how will the Fed react?”
While it is impossible to know for certain, analysts predict that U.S. Federal Reserve will likely boil down to whether or not the jobs gains in the latest ADP data translates to Friday’s labor department report. If it does, the Fed is expected to “announce plans to cut back its asset-purchase program in early November,” the Bloomberg Terminal reports.