From the Desk - Economic Commentary
Scott Goedken, Institutional Strategies Director - 10/23/2026
Treasury yields are slightly higher this morning after a strong rally on Thursday pushed the 10-year Treasury yield back below 5%. The move lower in rates came as investors sought safety amid continued weakness in technology shares. Equity markets are lower again this morning while oil prices continue to move in the opposite direction.
Brent crude oil is trading at its highest level since May and has gained nearly 4% this week as attacks on Saudi Arabian energy infrastructure and ongoing tensions with Iran raise concerns about global oil supplies. Higher energy prices are becoming increasingly difficult for markets to ignore, particularly as inflation pressures begin to show up in recent economic data.
October's S&P Global Flash U.S. PMI survey showed business activity remains exceptionally strong. The Composite PMI eased to 57.6 from 58.4 in September, but growth in both manufacturing and services remains near the strongest levels of the past five years. New orders increased at the fastest pace in more than four years, export demand improved, and employment growth accelerated to one of its strongest readings since 2022. At the same time, firms reported the fastest increase in selling prices since August 2022, with rising energy, freight, materials, and labor costs contributing to higher inflation pressures.
The final October University of Michigan Consumer Sentiment Survey painted a similar picture. Headline sentiment was little changed at 48.0, but consumers reported a sharp deterioration in views of current conditions as higher interest rates weighed on large-ticket purchases. One-year inflation expectations increased to 4.7% from 4.6%, while long-run inflation expectations rose to 3.5% from 3.4%, marking the second consecutive monthly increase in both measures.
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