Two More Fed Hikes, $117 Oil: What It Means for Hotel Debt

By Nathan Snyder, Editor, The Hotelier Times

Dallas Fed President Lorie Logan says the Fed needs “at least two more” quarter-point hikes. The bond market spent October rallying anyway: the 10-year Treasury closed the month at 4.94%, down 35 basis points from September. Brent crude settled at a six-month high of $117.64. For hotel owners the message is a split one. Long-term money got cheaper while short-term money is being pointed higher, and that changes the fixed-versus-floating math on your next loan.

What Logan Said

Speaking to Davidson College students on Friday, Oct. 30, Logan said: “It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25-basis-point rate increases.” After that, she said, it would make sense to pause and examine how the economy and markets respond (Dallas Fed speech text).

Logan is a voting member of the Federal Open Market Committee in 2026, according to the Federal Reserve’s FOMC roster. She voted with the majority this week to hold the federal funds target range at 3.75% to 4%, after the Committee raised rates by a quarter point in September. She also made clear the pause was about timing, not direction: “skipping a meeting does not change the monetary policy destination.”

Her estimate of how far the Fed still has to go is specific. Logan said she believes the target range is “at least 50 basis points” below the level that would create some modest restriction and begin to bring inflation back to target. She cited core PCE inflation of 3.1% over the 12 months through September and said price pressures are broad, “not just those affected by temporary factors such as tariffs and the energy shock.”

Logan stressed that these are her own views and not necessarily those of her FOMC colleagues. That matters: this is one voter’s path, not a Committee decision. But it is a voter’s path, and it lines up with markets that still price a December hike.

One line in the speech is good news for borrowers: “Credit spreads widened in recent weeks but remain compressed by historical standards. Banks remain eager to lend.” For hotel owners heading into 2027 maturities, that suggests the problem is the cost of credit, not access to it.

The Month-End Bond Rally

The U.S. Treasury’s daily par yield curve shows how much the long end moved in October:

• 2-year: 4.56% on Oct. 30, down 13 basis points on the week and 32 on the month.
• 5-year: 4.71%, down 11 basis points on the week and 38 on the month.
• 10-year: 4.94%, down 6 basis points on the week and 35 on the month (from 5.29% on Sept. 30).
• 30-year: 5.31%, down 2 basis points on the week and 33 on the month.

FinancialMarkets.com, citing Reuters, reported that Treasuries were headed for their sharpest monthly gain in about three years even with a December hike still priced. CNBC’s Friday coverage tracked the same move.

The short end tells you where floating-rate costs sit today. The latest published overnight SOFR from the New York Fed is 3.94%, for Oct. 29. The 30-day average SOFR stood at about 3.90%.

Oil at a Six-Month High

December Brent settled at $117.64 a barrel on Friday, up $2.76, after touching $118, and WTI settled at $104.12, according to CNBC, citing Reuters. Both were the highest settles since late April. Brent rose 13.6% in October and WTI 15.2%.

CNBC reported that traders were bracing for a possible escalation in the Iran conflict after the Nov. 3 midterm elections, and that a tanker in the Strait of Hormuz was hit by explosive devices. It was “not immediately clear who was behind the attack,” CNBC said. A Saxo Bank briefing cited by CNBC expects crude to trade in a $70 to $90 range even after the conflict ends, compared with $60 to $70 before the war.