Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending February 13, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
2/17/26 8:30	Empire Manufacturing	Feb	7.40	7.70
2/17/26 10:00	NAHB Housing Market Index	Feb	--	37.00
2/18/26 7:00	MBA Mortgage Applications	13-Feb	--	-0.30%
2/18/26 8:30	Housing Starts MoM	Dec	5.10%	--
2/18/26 9:15	Industrial Production MoM	Jan	0.40%	0.40%
2/18/26 9:15	Capacity Utilization	Jan	76.40%	76.30%
2/19/26 8:30	Initial Jobless Claims	14-Feb	--	227k
2/20/26 8:30	Personal Income	Dec	0.40%	0.30%
2/20/26 8:30	Personal Spending	Dec	0.40%	0.50%
2/20/26 8:30	GDP Annualized QoQ	4Q A	2.80%	4.40%

Whereas last week’s labor market-related data provided uneasiness about conditions, the past week’s January jobs report was better than expected and thereby served to portray conditions to possibly be on firmer footing than feared. It also provided justification for the Fed’s decision to hold policy steady at its late-January meeting, as it essentially revealed the “signs of stabilization” that the Fed had cited in its communique. Some market strategists have retreated on their calls for rate cuts in 2025, although the market still prices for two. We provide further color herein on the report. Other data released during the week was mixed. Retail sales were on the weak side to close 2025, and January Existing Home Sales, hampered by unfavorable weather, fell the most in four years. The Friday morning CPI report, released after this update went to press, may spur a move in rates. The week ahead offers a crowded and steady slew of data in a holiday-shortened week, with multiple housing market reports. Note that some of the data, at least those issued by federal government bodies, are delayed and “off-schedule” reports, due to the most recent shutdown. 

NAHB-Wells Fargo Housing Market Index: Designed to track the pulse of the single-family housing market, the monthly survey of single-family builders will provide a fresh gauge of sales and activity.

Empire Manufacturing Survey: Following a climb from sub-0 territory in December to 7.7 last month, the February headline reading for NY state is expected to slip a tad to 7.4.

Housing Starts: The Census Bureau will release data for November and December. While somewhat dated, the report will help discern conditions at the close of 2025.

Industrial Production & Capacity Utilization:  Production is expected to post a softer rise of .3% M-o-M in January, while Utilization is expected to register at about the same as the month prior.  

Initial & Continuing Jobless Claims: Initial claims dipped by 4K this past week but are still ~18K higher than the readings two week ago, and the 4-week moving average rose by 5K to 219.5K. Continuing Claims, meanwhile, had been on an improving trend in January but registered a second consecutive increase (12K) in this past week’s update.

Pending Home Sales: Released on the 19th, the January update will reveal if any post-holidays rebound occurred from the prior 9.3% M-o-M decline in this leading indicator for the housing sector.

Personal Income & Spending Report: The PCE (Personal Consumption Expenditure) price index data for December may prove interesting, in terms of a gauge of inflation forces.

GDP Report: The advance report for Q4 is expected to reveal a 2.9% real-GDP annualized rate.

New Home Sales: To be released on the 20th, the update will encompass December activity and is expected to post at 738K.

University of Michigan Sentiment Report: To be released on the 20th, the revised/final report for February will summarize sentiment regarding current conditions, expectations, and inflation.

Building Permits: To be released on the 20th and yet another housing sector report to close the week, the final data for December will be issued on this leading indicator of activity.

Federal Reserve Bank Member Appearances:

• 2/18/2026 14:00  FOMC Meeting Minutes for January 28th FOMC
• 2/20/2026 13:15  Dallas Fed President Logan (voting member) speaks at Bank Regulation Conference.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	105 Bln; 95 Bln	2/19 -- 2/24
13-Week; 26-Week	89 Bln; 77 Bln	2/17 -- 2/19
6-Week	90 Bln	2/17 -- 2/19
52-Week	50 Bln	2/17 -- 2/19
TIPs	Offering Amount	Auction Date -- Settle Date
30-Year	9 Bln	2/19 -- 2/27
Bonds	Offering Amount	Auction Date -- Settle Date
20-Year	16 Bln	2/18 -- 3/2

Key Market Trends

Source: : Bloomberg. This week’s January jobs report was better than expected, with a rise of 130K nonfarm payrolls vs. 70K expectation and the unemployment rate dipping to 4.3 from 4.4%. In sum, it provided support to the view that the labor market, while not in a dynamic state, has regained firmer footing to begin the new year. However, as usual with datasets, especially those subject to revisions, some context can be helpful. Demographic and immigration patterns are likely impacting figures such as the decrease in the unemployment rate. Meanwhile, as seen here in the large share of Education & Health Services (RHS, 000’s), the breadth of job gains is relatively narrow. Of the 130K overall job gains, 124K of those were related to healthcare and social assistance. Moreover, this sector had also accounted for a sizable chunk of jobs growth in 2025. While “gains are gains”, this sector tends to drive less productivity and economic growth than other sectors; indeed, the gains may highlight mostly the aging demographics of the economy. For historical context, the healthcare and social assistance sector now has a 15% share of total nonfarm jobs, up from 8.5% in 1990. It also warrants noting that the January report did contain some positive trends in other sectors, most notably Professional & Business Services and construction, the latter possibly related to AI data centers.

Sources: Bloomberg. The jobs report also included the annual benchmark revisions to 2025 data. Total nonfarm payrolls were marked down by 862K, the largest downward revision since 2009. The revision resulted in an annual gain of 181K (RHS, mn) for 2025 which translates to a monthly average gain of only 15K, as opposed to the pre-revised 49K. As seen here, the annual gain was the weakest, outside of recessions, since 2003. As previously noted, demographic and immigration patterns have impacted labor markets, and surveys and data have generally portrayed less than dynamic conditions. In this light, the overall better-than-expected January jobs report, for now, provided signs of stability after the tepid growth in 2025.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of late-Thursday and after some up-and-down moves during the first three days of the week, the UST term curve was lower and flatter from a week prior. The 2- and 3-year were marginally changed, but the 5-year fell by ~5 bps and 10-year by ~7 bps. The long bond yield declined by ~11 bps. A chunk of the drop occurred on Thursday, post the poor home sales data and an afternoon dip in stocks. The market, meanwhile, has pushed out the timeline of prospective 2026 Fed rate cuts into summer. As of Thursday afternoon, the market prices the chance of a 25-bps Fed ease for the March 18th FOMC at ~7%, down from 25% last week. The market’s end-2026 forward is ~3.05%, the exact same as a week ago and which equates to ~2.4 25-bps rate cuts for the rest of 2026.

Source: Bloomberg. As we have noted in previous editions, Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have added stability to financing markets and helped to blunt any severe impacts from higher issuance (LHS, $mn) in UST’s and T-bills. As we can see here, since early January SOFR has stabilized in a tighter range of ~6bps relative to interest on reserve balances (IORB) at the Fed (RHS, %). Indeed, while the January month-end period experienced some elevated pressure on SOFR and ~5-bps widening in the spread to IORB, this move was minimal relative to moves during the tail end of last year. Currently at 0, the spread has not reverted to levels witnessed in H1 2025, but its volatility has diminished, and a greater consistency has returned to the space.

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday, short tenors were unchanged to lower by 1 to 3 bps from the week prior, with the 1-month-an-in space leading the dip. Some of the market indigestion from short-end supply increases in T-bills and Agency paper, a dynamic we covered in last week’s edition, ebbed and allowed for slightly better issuance, and, in turn, advance levels. As noted in the previous section, Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have clearly added stability to financing markets and helped to blunt any severe impacts from the higher issuance. Money Market Fund AUM, meanwhile, remains at high levels and has absorbed short-end paper and repo demand and thereby assisted as a stabilizer.
• The upcoming short week offers a crowded slate of data. Net issuance of UST’s and T-bills is positive on the 17th and 19th and may keep the mild pressures in liquidity and on SOFR intact for now

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was lower and flatter from a week ago. The 2-, 5-, and 10-year were 2, 9, and 10 bps lower, respectively. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves a 20-year nominal and a 30-year TIPS auction. 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.