U.S. rail dispute could contribute to wage inflation -investment manager

STORY: "If that does happen," Sharma added, "we could see the Fed staying hawkish for a very long time and the market will have to stay put with higher interest rates for longer."

Workers at the largest U.S. rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could cause significant damage to the U.S. economy and strand vital shipments of food and fuel.

Train and engine service members of the transportation division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) narrowly voted to reject the deal. That unit, which includes conductors, brakemen and other workers, joins three other unions in rejecting a deal brokered via a board appointed by U.S. President Joe Biden.

Railroads have slashed labor and other costs to bolster profits and are fiercely opposed to adding paid sick time that would require them to hire more staff. Those operators, which include Union Pacific, Berkshire Hathaway Inc's BNSF and CSX, say the contract deal has the most generous wage package in almost 50 years of national rail negotiations.