More than 143,000 autoworkers are expected to strike when their contracts with America's Big Three automakers expire on Thursday night.
A prolonged work stoppage by the United Auto Workers (UAW) union at Stellantis (STLA), GM (GM), and Ford (F) could have broad economic impacts that reach as far as the Federal Reserve's next decision on interest rates.
"The impact would cloud the incoming economic data for the next few months, making it harder for the Fed to claim that the figures are breaking decisively one way or the other," Oxford Economics economists Michael Pearce and Nancy Vanden Houten wrote in a note on Wednesday. "That would add, at the margin, to the case for a pause in rates."
Read more: What the latest Fed rate hike plan means for bank accounts, CDs, loans, and credit cards
UAW contracts are set to expire at midnight on Thursday, and UAW President Shawn Fain has threatened union members will strike if the two sides can't agree on key issues including wage increases and increased worker benefits.