EIA: Cushing, Oklahoma crude inventories fell 624,000 barrels in the week to Oct. 23; prior week showed a 987,000-barrel build.

1. US Treasury Yields Remain High Data from the US Treasury Department shows that the 10-year US Treasury yield reached 5.31% on October 5th, before falling back to 4.99% by October 27th. Despite the recent decline, the 10-year US Treasury yield has risen by approximately 84 basis points year-to-date, indicating that long-term financing costs remain high. 2. Mortgage Rates Remain High Freddie Mac data shows that as of October 22nd, the average interest rate for a 30-year fixed mortgage in the US was 7.32%, lower than the 7.40% in mid-October, but still higher than the 6.95% on September 17th. Even if the Federal Reserve temporarily refrains from raising interest rates, the housing market continues to bear high financing costs. 3. Corporate Financing Conditions Continue to Tighten: Sage Advisory pointed out on October 26th that although long-term US Treasury yields have given back the gains made after the September Fed meeting, credit spreads for investment-grade and high-yield corporate bonds have widened by 12 and 67 basis points respectively since the September meeting. This means the market is demanding higher credit risk premiums from businesses, and the tightening pressure in the credit market has not yet subsided. 4. The Market May Have Completed Partial Tightening PIMCO estimates that as of the end of the second quarter of 2026, US financial conditions remain relatively loose compared to its estimated reasonable level. The recent rise in long-term interest rates suggests that the market may have already completed most of the necessary tightening, reducing the need for the Federal Reserve to rely on continuous interest rate hikes to tighten financial conditions. 5. Impact on the October Fed Meeting: Nationwide Chief Economist Kathy Bostjancic believes that US economic and inflation data still support interest rate hikes, but the sharp rise in long-term Treasury yields may cause the economic slowdown to exceed the Fed's original intentions. Therefore, officials have chosen to wait for more data to assess the impact of existing tightening measures. 6. Pausing Interest Rate Hikes Does Not Mean the End of Tightening PIMCO believes that the rise in long-term interest rates has provided the Fed with space to observe the economic response, but the risk of inflation has not been eliminated. In other words, the financial market has already taken on some of the tightening burden for the Fed, which may reduce the need for immediate interest rate hikes, but may not completely replace subsequent rate hikes.

U.S. EIA implied motor gasoline demand for week to Oct. 23: 9.2033 mln b/d, prior 9.9084 mln b/d.