Key Takeaways
- U.S. crude oil inventories saw a significant draw of 3.426 million barrels for the week ending November 14, exceeding expectations and signaling tighter supply, while gasoline stocks unexpectedly rose.
- Former White House economist Kevin Hassett warned that a return to fiscal irresponsibility could reignite inflation, though he noted inflation is now "more under control" after acknowledging previous missteps in controlling it.
- The Federal Reserve's Miran advocated for an immediate end to Quantitative Easing (QE) at the October meeting and suggested that easing bank regulations could lead to a smaller Fed balance sheet.
- U.S. equities rallied, with the S&P 500 (SPX) up 1% and the Nasdaq 100 (NDX) gaining 1.5%, as economic data and corporate news provided market impetus.
- Walmart (WMT) is reportedly in discussions to acquire R&A Data, a startup specializing in combating scams and counterfeits, indicating a strategic move into digital trust and safety.
Energy Markets See Significant Drawdown
U.S. crude oil inventories experienced a substantial decrease of 3.426 million barrels for the week ending November 14, sharply contrasting with an estimated draw of 1.700 million barrels and a previous build of 6.413 million barrels. This larger-than-anticipated decline suggests a tightening in crude supply. Inventories at Cushing, Oklahoma, a key delivery hub, also fell by 698,000 barrels, following a previous reduction of 346,000 barrels.
Despite the crude draw, gasoline inventories unexpectedly rose by 2.327 million barrels, significantly above the estimated increase of 50,000 barrels. Distillate stocks, however, saw a modest increase of 171,000 barrels, against an estimated decrease. Refinery utilization rates also edged up by 0.60%.
Inflationary Pressures and Fiscal Responsibility
Kevin Hassett, a former White House economist, issued a stark warning that fiscal irresponsibility could lead to a resurgence in inflation. He acknowledged that inflation was not "transitory" and that "we lost control" over it in the past. However, Hassett also stated that inflation is now "more under control," though "not all the way there." He also noted that the final impact of tariffs on inflation is "still to be seen."
Hassett further commented on the labor market, indicating that unemployment is "a little higher" than equilibrium. On the economic front, he highlighted a "massive" productivity shift occurring in 85% of the economy and described the third quarter of 2025 as the "best ever for earnings surprises," with future revisions likely to show even stronger productivity.
Federal Reserve Policy and Balance Sheet Outlook
Federal Reserve official Miran expressed strong support for the U.S. central bank's efforts to streamline bank regulations. Miran indicated that the size of the Fed's balance sheet is ultimately dictated by regulations and that easing these regulations could allow for a smaller balance sheet, which would also reduce interest payouts to banks.
Miran revealed that he supported the Fed's decision to stop the balance sheet run-off and would have preferred an immediate end to Quantitative Easing (QE) at the October 28-29 policy meeting, rather than waiting until December 1. He also stated that it is "possible" the Fed could shrink its balance sheet again in the future.
Market Performance and Economic Indicators
U.S. equity markets saw broad gains, with the S&P 500 (SPX) extending its rise to 1% and the Nasdaq 100 (NDX) climbing 1.5%. Meanwhile, UK 30-year Gilt yields increased by more than 6 basis points to 5.451%, reaching their highest level since October 13.
The Atlanta Fed's GDPNow forecast for Q4 improved, rising to 4.2% from a previous estimate of 4.1%. This suggests a robust economic outlook for the final quarter of the year.
Corporate Developments and Political Engagements
Walmart (WMT) is reportedly in discussions to acquire R&A Data, a startup focused on combating scams and counterfeits. This potential acquisition signals Walmart's strategic focus on enhancing trust and safety in its digital operations.
In political news, Treasury Secretary Bessent is meeting with House Budget Committee Republicans to discuss trade, OBBB (presumably referring to the "Omnibus Budget Reconciliation Bill" or similar budget legislation), and budget issues. Across the Atlantic, Labour leader Keir Starmer refused to rule out extending the freeze on income tax thresholds in the UK. Geopolitically, the IDF has warned of more strikes on Hezbollah sites in South Lebanon.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.