Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending August 22, 2025.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
8/25/25 10:00	New Home Sales	Jul	626k	627k
8/25/2025	Building Permits	Jul F	--	1,354k
8/26/25 8:30	Durable Goods Orders	Jul P	-3.40%	-9.40%
8/26/25 9:00	S&P CoreLogic CS 20-City MoM SA	Jun	--	-0.34%
8/26/25 10:00	Conf. Board Consumer Confidence	Aug	96.80	97.20
8/28/25 8:30	GDP Annualized QoQ	2Q S	3.10%	3.00%
8/28/25 8:30	Initial Jobless Claims	23-Aug	--	235k
8/28/25 8:30	Continuing Claims	16-Aug	--	1,972k
8/28/25 10:00	Pending Home Sales MoM	Jul	0.30%	-0.80%
8/29/25 10:00	U. of Mich. Sentiment	Aug F	--	58.60

Note: The Weekly Update will return on Friday, September 5th. Have a good Labor Day holiday.

The past week’s “second-tier” data shed little new light on the path of Fed policy, and markets moved modestly as a result. Housing-related data generally continued to portray a sector bedeviled by affordability, costs, labor, and supply issues. Housing starts and existing home sales both rebounded a touch, but building permits, a more forward-looking barometer, continued to decline. The July FOMC Minutes, meanwhile, revealed that most members considered inflation to currently be the most pressing concern of the Fed’s dual inflation/employment mandate. The Minutes also noted that it was “important to ensure that longer-term inflation expectations remained well-anchored”. Note, however, that the last FOMC meeting concluded just two days prior to the August 1st weaker-than-expected jobs report.

The upcoming week serves a plethora of data. Drawing first and foremost attention, however, will be Fed Chairman Powell’s speech at the Jackson Hole Symposium this Friday morning shortly after this publication hits inboxes. Thereafter, inflation data and the September 5th jobs report are the clear drivers of any potential Fed cut at September’s FOMC.  

New Home Sales: Sales are expected to be flat vs last month’s reading at 627K.

Building Permits: Permits declined in July to an annual rate of 1354K units in the past week’s preliminary report, a historical low since June 2020. The final number is expected to be weak.

S&P CoreLogic CS 20-City M-o-M: The index estimate for June is expected to portray continued weakness, with a projected decrease in prices of .20%.

Conference Board Consumer Confidence: Consumer Confidence improved by 2 points in July to 97.2, but is expected to retreat by approximately half a point to 96.8

GDP Annualized QoQ:  The second look at Q2 GDP is expected to improve slightly to 3.10%. Recall that this quarter’s headline number should be notably boosted by tariff front-running activity.

Initial and Continuing Jobless Claims:  Both Initial and Continuing Claims experienced an increase this past week vs. the week prior, perhaps revealing softening in the employment space.

Personal Income Report: To be released at 8:30 on 8/29, the report’s PCE Price components for July will provide another important look at inflation trends both month-on-month and year-on-year. 

Pending Home Sales:  Sales are expected to post a slight rebound vs. last month’s negative reading, or +0.30% for July vs. June’s -0.80%.

U. Of Michigan Sentiment:  The index is expected to mirror the August preliminary figure of 58.6 from earlier this month.

Federal Reserve Appearances:

• 8/22 -- Fed Chair Powell to give speech at 10 a.m. EST on the “Economic Outlook and Framework Review” at the Jackson Hole Economic Policy Symposium.
• 8/25 -- Fed's Logan and Williams provide separate speeches and remarks at the Bank of Mexico Centennial Conference.
• 8/28 -- Fed's Waller Speaks on Monetary Policy at Economic Club of Miami.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date
4-Week; 8-Week	100 Bln; 85 Bln	8/28
13-Week; 26-Week	82 Bln;73 Bln	8/25
6-Week	85 Bln	8/26
Notes	Offering Amount	Auction Date
2-Year; 5-Year	69 Bln; 70 Bln	8/26; 8/27
7-Year	44 Bln	8/28
Bonds	Offering Amount	Auction Date
FRNs - 1-Year 11-Month	28 Bln	8/27

Key Market Trends

Sources: Bloomberg; US Dept. of Labor. Thursday morning’s weekly jobless claims report portrayed a softening labor market backdrop. The weekly figure of 235K for initial claims was the highest since June. Meanwhile, as shown here and likely better reflective of a trend, is that Continuing Claims (aka “registered unemployed”) remain elevated over recent months, and the fresh 1972K print was the highest since November 2021. This trend indicates that new jobs are becoming harder to find. Given that employment is one-half of the Fed’s dual mandate, chances of a September rate cut seem to rest heavily on further softening in the labor market. Therefore, the jobless claims and the September 5th employment situation reports will be key indicators in the weeks ahead.

Sources: Federal Reserve Bank of Atlanta. While home affordability issues have been present the last few years, they are becoming more acute by some measures. Shown here is the Atlanta Fed’s Home Ownership Affordability Monitor (HOAM) Index, a monthly measure of the median-income household’s capacity to afford the median-priced home at the national, metro, and metro-county levels. An index value of 100 or above indicates a median-income family could afford a median-priced home; a value below 100 indicates a median-income family would not be able to afford a median-priced home at current rates. The latest national reading for June was the worst reading in over twenty years. The index for the NY-NJ metro area was also near the multi-year low of nineteen years ago, thereby serving to highlight the importance of the FHLB-NY’s community and housing programs.

Sources: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve was modestly higher from the week prior. The 2, 5, and 10-year rose by ~6, 4, and 4 bps, respectively. The market dialed back its pricing of a Fed ease for September’s FOMC to ~69% from ~85% last week. The markets this past week somewhat marked time, with limited ranges in rates, in anticipation of Fed Chair Powell’s Jackson Hole speech. Given the Fed’s wait-and-see posture, the upcoming inflation and jobs data will be key to any prospective rate change next month. As of Thursday afternoon, the market priced end-2025 Fed Funds at 3.86%, or 9 bps higher than a week ago. The market’s end-2026 forward is ~3.07%, or 2 bps higher than a week ago.

Sources: Bloomberg. Many financial conditions metrics remain in “loose” territory. Last week we reported on the prevailing low levels of implied volatility in option markets. Investment grade corporate bond spreads, meanwhile, now trade near the tightest levels in over two decades, as seen here in the Bloomberg U.S. Investment Grade Corporate Bond Index. The index spread hit a multi-decade low of 73 on 8/15 and is last at 76 bps. Clearly, investors remain eager to pick up incremental yield to USTs and are willing to absorb the attendant credit/default risk. From this perspective, it is an attractive time to issue bonds in the market.

FHLBNY Advance Rates Observations

Front-End Rates

• As of Thursday midday, short-end rates were little changed from the week prior. The 6-month dipped by two bps, as there has been strong investor demand for our paper. Net T-bill supply continues at an aggressively positive pace, as Treasury rebuilds its General Account. A larger proportion of the fresh issuance has been front-loaded in the shorter 4- to 8-week maturity sector, and the net issuance is expected to remain positive through end-September. Robust Money Market Fund AUM, however, has helped to absorb the supply and thereby also contain severe impacts on our paper. Indeed, spreads on our paper have improved in recent weeks; as a point of reference, our 3-month SOFR ARC is ~4 bps below its year-to-date average and only ~2 bps above the low of 2025.
• Prior to next week’s slate of data, the markets will monitor this weekend’s Jackson Hole symposium for hints to the course of Fed action.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was 3 to 4 bps higher from the week prior. Kindly refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves a slate of 2/5/7-year auctions. Note that UST auctions usually occur at 1pm and can occasionally spur volatility around that time. Please contact the Member Services Desk for further information on market dynamics, rate levels, or products.