The 10-year Treasury eased toward 4.9% todaty after Democrats won control of Congress. Energy costs, two Fed votes for higher rates and a wave of local data center bans keep the pressure on operating budgets and refinancing plans.
The 10-year Treasury yield headed toward 4.9% this morning, according to Fortune, as investors bought bonds after Democrats won control of the House and Senate. A divided government makes large new spending packages harder to pass, and bond buyers read that as less pressure on federal borrowing. The relief is modest. The 10-year closed at 5.31% on October 5, and the energy costs that pushed inflation to 3.7% have not gone away.
Key Facts at a Glance
Treasury yields: The 10-year fell toward 4.9% and the 30-year below 5.3% early on this morning, after topping 5% over the summer (Fortune).
Federal Reserve: The Fed held its target at 3.75% to 4.00% on October 28 in a 10-2 vote; Governors Lisa Cook and Beth Hammack voted to raise rates a quarter point.
Oil: Brent settled at $103.60 and West Texas Intermediate at $96.09 on November 3, Brent’s lowest close since October 7, on hopes for peace talks involving Ukraine and Iran.
Fuel: Diesel averaged $6.352 a gallon in the week of October 26, a record $6.521 in the Rocky Mountain region (EIA). Gasoline averaged $4.15 on Election Day, the highest for any Election Day on record (AAA via CBS News).
Electricity: Commercial customers paid an average of 14.47 cents per kilowatt-hour in August, up 4.3% from a year earlier (EIA).
Energy Keeps Inflation and Rates Elevated
Energy costs and capital costs now move together. Consumer prices rose 3.7% from a year earlier in September, with energy leading the increase. The Federal Open Market Committee held rates on October 28 and said “inflation remains elevated.” Two members wanted a quarter-point increase on top of September’s.
That keeps borrowing costs high even as long-term yields ease. CRE Daily, summarizing The Wall Street Journal, reports that buyers who signed contracts earlier this year are asking for price cuts before closing, a practice known as retrading, after rates rose in late summer. One buyer won a $600,000 reduction on a roughly $20 million apartment deal when financing costs rose more than 0.6 percentage points. Trepp reported that 11.42% of commercial mortgage-backed security loans were with special servicers in August, the highest share since 2013.
The Election Changes the Policy Outlook
Democrats won control of both chambers on November 3, according to CBS News projections, with some races still uncalled on Wednesday morning. Voters went to the polls with gasoline at a record for an Election Day and exit polls showing negative views of the economy.
For energy policy, the new Congress takes office in January. The current Congress returns November 9 for a short session that includes a procedural vote on the Senate permitting bill and a federal funding deadline of December 11. Fortune reported that prediction-market odds of a government shutdown rose to 45% after the results. Owners should expect policy uncertainty on federal energy programs through the winter.
Local Voters Put Limits on Data Centers
The clearest energy verdict came from local ballots. In Ohio, at least 14 of 18 municipalities that voted on data center measures passed bans or new limits, according to results reported by Fortune and others; most of the 10 bans apply to sites drawing more than 25 megawatts. Stateline reported that 33 local measures limiting data centers had passed or were leading nationwide late Tuesday, with one result favoring the industry.
For owners, those votes shape grid costs as well as land use. Large data center loads drive capacity prices. PJM has proposed paying up to $555 per megawatt-day in a separate backstop procurement, distinct from the $325/MW-day price that cleared the underlying capacity auction, to cover the same 6,831 MW shortfall. Fewer projects in a zone could mean less growth to pay for; projects that move elsewhere carry their costs with them.
Where the Pressure Lands
Office owners on gross or modified gross leases absorb higher electricity and capacity costs directly in operating expenses. Industrial, logistics and retail owners feel diesel through freight, landscaping, snow removal and backup generator fuel. Multifamily owners carry common-area and central plant loads. In each case, energy now competes with debt service for the same cash flow. A building that controls its peak demand and locks in long-term capital is less exposed to both the energy market and the bond market.
Three Levers Owners Control
Lower the peak. Capacity charges in regions such as PJM depend on each account’s demand during the grid’s busiest hours. Storage, pre-cooling and load shifting reduce that share regardless of where auction prices land.
Fix the cost of capital. Commercial Property Assessed Clean Energy (C-PACE) financing is repaid through the property tax bill over long terms and stays with the property, so it does not reset in a refinancing. Mortgage lender consent is usually required.
Sell flexibility. California regulators on October 29 directed the state’s three largest utilities to coordinate customer batteries, EVs and flexible loads as grid resources. Where programs pay for flexibility, building equipment can earn revenue.
Three Actions for This Week
Rerun refinancing models for loans maturing in 2027 with today’s yields and a December Fed scenario that includes another quarter-point increase.
Budget winter service contracts and generator fuel at current diesel prices, and confirm which contracts allow fuel surcharges.
For sites marketed to data centers or other large loads, check local ballot and moratorium activity before the next leasing push.
The Bottom Line
The bond market gave owners a small break this week. Energy prices, a divided Fed and local resistance to large loads keep operating and capital costs elevated. The owners best positioned for 2027 are the ones who manage their own peak demand, secure long-term capital where they can and treat flexible equipment as a revenue source.
Sources
American Public Power Association. “PJM Files Amended Reliability Backstop Proposal at FERC.” Oct. 30, 2026. https://www.publicpower.org/node/31581
California Public Utilities Commission. “CPUC Advances Integration of Customer Energy Resources Into California’s Electric Grid.” Oct. 29, 2026. https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-advances-integration-of-customer-energy-resources
CBS News. “2026 Midterm Election Results as Democrats Decisively Win Control of House and Senate.” Nov. 4, 2026. https://www.cbsnews.com/live-updates/election-day-2026-midterms/
CRE Daily (summarizing The Wall Street Journal). “Rate Surge Fuels Retrades as CRE Buyers Demand Price Cuts.” Oct. 6, 2026. https://www.credaily.com/?p=223639
Federal Reserve Board. “Federal Reserve Issues FOMC Statement.” Oct. 28, 2026. https://federalreserve.gov/newsevents/pressreleases/monetary20261028a.htm
Fortune. “Ohioans Overwhelmingly Oppose Data Centers. 21 Ballot Measures Just Put Their Ire to the Test.” Nov. 4, 2026. https://fortune.com/2026/11/04/ohio-data-center-ballot-measures-midterm-elections/
Fortune. “US Midterms: Bond Yields Fall as Investors Digest Fiscal Gridlock Questions.” Nov. 4, 2026. https://fortune.com/2026/11/04/wall-street-treasuries-yields-demand-budget-fiscal-gridlock/
Federal Reserve Bank of St. Louis (FRED), 10-year Treasury yield: https://fred.stlouisfed.org/series/DGS10
Nation Thailand (Reuters). “Brent Falls 1% on November 3 Amid Hopes for Peace Deals.” Nov. 3, 2026. https://www.nationthailand.com/news/world/40073076
StockAnalysis.com. “Ohio Votes to Ban or Limit Data Centers in at Least 14 Towns.” Nov. 4, 2026. https://stockanalysis.com/news/ohio-voters-pass-data-center-bans/
U.S. Bureau of Labor Statistics. “Consumer Price Index Summary.” Oct. 2026. https://www.bls.gov/news.release/cpi.nr0.htm
U.S. Department of Energy, Better Buildings Solution Center. “What Is Commercial Property Assessed Clean Energy?.” Accessed Nov. 2026. https://betterbuildingssolutioncenter.energy.gov/financing-navigator/option/cpace
U.S. Department of the Treasury. “Daily Treasury Par Yield Curve Rates, October 2026.” Oct. 2026. https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202610
U.S. Energy Information Administration. “Electricity Monthly Update: End Use.” Oct. 2026. https://eia.gov/electricity/monthly/update/end-use.php
U.S. Energy Information Administration. “Gasoline and Diesel Fuel Update.” Oct. 26, 2026. https://www.eia.gov/petroleum/gasdiesel/