The David Lin Report · Thursday, October 1, 2026
High diesel prices are a significant driver of inflation, acting as a pervasive input cost across nearly all sectors of the economy. Unlike gasoline, diesel demand is less elastic and harder to reduce without a broad economic slowdown. This persistent inflationary pressure may lead central banks to continue raising interest rates.
“diesel in particular is a input cost for every commodity, period, and sentence. If it has trucks, if it's transportation, diesel's in there somewhere.”
“And I think that's how best to think about it now as well. And I think, The diesel focused aspect of the crisis makes it slightly different than some of the crises we've experienced in the past, where it was mainly crude oil doing most of the heavy lifting.”
“And I think that the only way you're going to reduce, like rate hikes are also one of these things that would take, would have a particularly kind of impactful, you know, reduction in say diesel demand because diesel's typically more associated with industrial activity, investment, et cetera.”