Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending October 31, 2025.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
11/3/25 10:00	ISM Manufacturing	Oct	49.20	49.10
11/3/25 10:00	Construction Spending MoM	Sep	--	--
11/4/25 10:00	JOLTS Job Openings	Sep	--	7,227k
11/4/25 10:00	Factory Orders	Sep	--	--
11/5/25 7:00	MBA Mortgage Applications	31-Oct	--	7.10%
11/5/25 10:00	ISM Services Index	Oct	51.00	50.00
11/6/25 8:30	Initial Jobless Claims	1-Nov	--	--
11/6/25 8:30	Continuing Claims	25-Oct	--	--
11/7/25 10:00	U. of Mich. Sentiment	Nov P	54.00	53.60
11/7/25 11:00	NY Fed 1-Yr Inflation Expectations	Oct	--	3.38%

The highlight of the past week was Wednesday’s FOMC decision. While the Fed produced the market’s baked-in-the-cake 25-bps rate cut, there was division of opinion within the Fed. Unsurprisingly, the recently-appointed Governor Miran voted for a 50-bp cut. Surprisingly, however, Kansas City Fed President Schmid voted for no rate change. In the post-meeting press conference, Chairman Powell declared that “a further reduction in the policy rate is not a foregone conclusion, far from it”. The market, in turn, recalibrated its forward pricing, and yields staged a mini-surge. The week ahead would normally offer a slew of influential data, including the monthly jobs report, but much of it is again subject to delay, due to the government shutdown.  

Institute for Supply Management (ISM) Manufacturing Report: The survey report for October will provide an updated snapshot of overall conditions as well as prices and employment.

Construction Spending: The report for September is subject to delay, as it is a Census Bureau report.

Job Openings & Labor Turnover Survey Report: The report for September is subject to delay, given that it is a Bureau of Labor Statistics (BLS) report.

Factory Orders: The report for September is subject to delay, as it is a Census Bureau report.

MBA Mortgage Applications: This past week’s relatively healthy gain of 7.1% was sparked by lower rates, and so another gain appears highly contingent on rates not rising much further off pre-FOMC levels (Bankrate.com’s 30-year average was 6.28% on October 28th).   

Institute for Supply Management (ISM) Services Report: The October report is expected to improve a tad from last month and will provide an updated snapshot of overall conditions as well as prices and employment.

Jobless Claims: Subject to delay, issued by Department of Labor.

Employment Situation: The monthly release of this tier-1 data will be subject to delay again, as it is a BLS report.

University of Michigan Consumer Sentiment: The preliminary release for November will provide an update on consumer views of economic conditions and inflation expectations. 

NY Fed Survey of Consumer Expectations: The October report will serve as a counterpart to the Michigan survey, as it will also provide an update on consumer views of job markets and inflation. 

Federal Reserve Bank Member Appearances:

• 11/06/2025 11:00  Fed's Williams speaks at Goethe University Frankfurt
• 11/06/2025 12:00  Fed's Hammack speaks at the Economic Club of New York
• 11/06/2025 16:30  Fed's Paulson speaks on Consumer Finance Institute
• 11/06/2025 17:30  Fed's Musalem speaks at a Fireside Chat on Monetary Policy
• 11/07/2025 3:00  Fed's Williams speaks in Frankfurt

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date
4-Week; 8-Week	110 Bln; 95 Bln	11/6
13-Week; 26-Week	86 Bln; 77 Bln	11/3
6-Week	95 Bln	11/4
Notes	Offering Amount	Auction Date
No scheduled Note offerings.
Bonds	Offering Amount	Auction Date
No scheduled Bond offerings.

Key Market Trends

Source: Bloomberg; Indeed. In the post-FOMC press conference, Chair Powell framed the 25-bps rate cut as a risk-management move and stated that “downside risks to employment appear to have risen”. Indeed, pardon the pun, that can be seen here in the recent (data through October 24th) downward trend of Indeed’s Overall Job Postings index (Gold, LHS). Powell also noted that Indeed’s job openings had suggested stability over the last four weeks, as can be viewed here in the recent rangebound moves of Indeed’s New Job Postings index (White, RHS). Powell noted that both the supply of and demand for jobs has declined in recent months, on account of a variety of factors such as uncertainty and immigration patterns. In this respect, the unemployment rate is a key barometer to assess labor market conditions. Unfortunately, the BLS’ employment situation report appears likely to be delayed again this upcoming week.   

Source: Bloomberg. Kansas City Fed President Schmid dissented on the FOMC’s rate cut, as he voted for no cut. While he may have stood out in this respect, Chair Powell also noted that a “growing chorus feels like maybe the Fed should wait a cycle” and that “some on the committee think it’s time to take a step back”. More bluntly, he declared that “a further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it”. Two prominent reasons why some members may feel this way are illuminated here. Financial conditions are far from tight, as the Bloomberg Financial Conditions Index (White, RHS) resides well above 0. Meanwhile, the Consumer Price Index (CPI, Gold, LHS, %) currently registers at 3% which is well above the Fed’s stated 2% goal and is not moving in the right direction.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve was higher and a bit flatter from the week prior, with the 2, 5, and 10-year higher by, respectively, 12, 11, and 9 bps. The bulk of the move occurred on Wednesday afternoon in the wake of Powell’s post-FOMC press conference, as his comments triggered the market to recalibrate its pricing of the timeline and extent of further projected Fed easing. As of Thursday afternoon, the market priced end-2025 Fed Funds at 3.71%, or 7 bps higher than a week ago, which equates to ~65% chance of another 25-bps rate cut at the December 10th FOMC. The market’s end-2026 forward is ~3.06%, or 16 bps higher than a week ago. 

Source: Bloomberg. The FOMC responded to recent dynamics in the short-term rates market via the announcement of the impending end of Quantitative Tightening (“QT”). As of December 1st, the Fed will cease all portfolio runoff and reinvest principal payments on its securities portfolio. UST principal payments will be reinvested at UST auctions, while Agency and Agency MBS principal payments will be reinvested into T-bills. A snapshot of the recent “gummed-up” plumbing in financing markets is shown here. In recent weeks, repo rates had traded above the Fed Funds Upper Bound rate of 4.25%, as charted here in the spreads of the Upper Bound to both the Treasury General Collateral Rate (TGCR) and SOFR. Given that 4.25% was the minimum rate on the Fed’s Standing Repo Facility (SRF), the SRF began to experience increased usage in recent weeks, as also seen here. A main contributor to these elevated repo rates has been larger-than-expected net positive T-bill issuance by the Treasury as it builds up its General Account. In this regard, the end of QT should offer some relief to these market conditions. The Fed reinvestments into T-bills should prove particularly helpful. Also likely to be beneficial is a projected negative net T-bill issuance pattern in December. 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday, short-end rates were mixed vs. the week prior. The 1-week to 3-month sector, led by shorter tenors, was lower by 2 to 16 bps, as our issuance spreads improved in the past week and maturities moved further into the timeline of the Fed’s projected rate cuts.  Overnight, meanwhile, dropped by 28 bps, owing mostly to the Fed’s rate cut. Positive net T-bill issuance and upward pressure on short-end financing rates and SOFR, as covered in our recent editions, persist and continue to inject volatility into the shortest advance tenors. The prevailing and relatively elevated SOFR-to-Fed Funds spread appears likely to persist in the near-term, especially with the upcoming $58bn total net new cash of 2/5/7-year UST auctions all settling October 31st.  Relief on this front could be on the horizon, however, as the Fed will begin portfolio reinvestments into T-bills on December 1st and net T-bill supply is projected to turn negative in December.
• The markets will monitor the limited data flow, Fedspeak, and any announcements regarding a shutdown resolution.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was higher and slightly flatter vs. the week prior. The 2, 5, and 10-year rose by 12, 11, and 9 bps, respectively. Kindly refer to the previous section for color on market dynamics and changes.  
• On the UST term supply front, the upcoming week serves as a reprieve from 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.