Asked whether diesel prices could ease within four weeks, Sen says she doesn't count on the mild winter many forecast with a super El Niño. She expects European governments to hold back strategic reserves for the winter, and sees recession as the bigger downside risk to diesel in 2027.
…think if you did see more SPR come out from Europe, there'll be a little bit of a temporary relief. But again, I want to stress that, you know, we've been talking about super El Nino. And again, I'm not a big weather believer. And everybody keeps telling me we're going to have a super warm winter.
We might.
That might save us. But a warm winter hope cannot be a strategy. And we've seen some very early snow in Europe. I saw some pictures and I was like, I'm actually glad I'm not there. But I think that's, again, going to rattle the markets because suddenly you are going to need gas and gas stocks are super low in Europe. And I think that's one of the big reasons why European governments have been holding back on releasing diesel prematurely because they might actually need to release this in the winter. So I don't see in this kind of a scenario, you're going to, get a big relief in diesel prices in the next four weeks. I think over time, the biggest challenge or the biggest downside to diesel actually becomes an economic recession. None of us want that, but I think that becomes the second half of the 2027 story.
Stay with us. More Bloomberg surveillance coming up after this.
The final major read of inflation before the October Fed decision coming this week. We'll also get comments from Fed Chair Kevin Walsh in the days ahead. This is a take from Torsten Slok of Apollo. He writes the following recently. High rates choke off construction, which pushes rents and inflation…
Of CPI. Torsten joins us now for more. Torsten, good morning.