Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending February 20, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
2/23/26 10:00	Factory Orders	Dec	1.00%	2.70%
2/24/26 8:15	ADP Weekly Employment Change	7-Feb	--	10.250K
2/24/26 9:00	FHFA House Price Index MoM	Dec	--	0.60%
2/24/26 9:00	S&P Cotality CS 20-City MoM SA	Dec	--	0.47%
2/24/26 10:00	Conf. Board Consumer Confidence	Feb	87.50	84.50
2/25/26 7:00	MBA Mortgage Applications	20-Feb	--	2.80%
2/26/26 8:30	Initial Jobless Claims	21-Feb	--	206K
2/27/26 8:30	PPI Final Demand MoM	Jan	0.30%	0.50%
2/27/26 8:30	PPI Final Demand YoY	Jan	--	3.00%
2/27/26 10:00	Construction Spending MoM	Dec	0.20%	--

Data released in the past week was uneven but with an overall slight bias to better-than-expected results. A slew of housing-related reports delivered mixed news. Housing starts and building permits registered hopeful gains in December, but January’s pending sales of existing homes posted a disappointing drop to a record low, and homebuilder sentiment (see chart and color in next section) declined to a multi-month low this month. Manufacturing and industrial data, meanwhile and somewhat surprisingly, posted slightly better-than-forecast levels. On the Fed front, the Minutes for the January 28 FOMC meeting were released and revealed that “almost all” viewed the funds rate as “within the range of estimates of the neutral level”, and several supported a more two-sided forward guidance to reflect the possibility of rate hikes if inflation remained at above-target levels. In this light, a near-term rate cut appears low probability.     

Factory Orders: After a 2.7% M-o-M gain in November, the Census Bureau will release the December 2025 data for new orders for manufactured goods. A more modest 1% gain is expected. 

ADP Weekly Employment Change: In possible signs of improved labor market stability, the 4-week trailing average through January 31 increased to 10.25K from 7.75K the week prior. The fresh reading may determine if any upward trend remains intact.

FHFA House Price Index: After a .6% M-o-M gain in November, the December posting will provide guidance on prices at the end of last year.

S&P Cotality Case-Shiller Home Price Indices: The report for December will provide fresh insight for residential house prices for 2025’s close and will follow a mild 1.4% annual gain for national prices in November. Regional divergence persisted, as midwestern and northeastern markets posted gains, while Sun Belt cities registered declines. The more tailored 20-city index will also be released.

Conference Board Consumer Confidence Report: This barometer fell in January to its lowest point, 84.5, since 2014. Both the Present Situation and Expectations indices registered notable declines as well. For February, the report is expected to modestly rebound from the dour sentiment of January, with the headline index forecast to edge up to 87.4.

Mortgage Applications: After a robust start to the year, applications have tapered off in the past month. The past week’s headline index at least posted a positive 2.8% weekly reading, after a -.3% reading the week prior. The fresh data will reveal whether not slightly lower rates provided any further tailwind to gains.

Initial & Continuing Jobless Claims: Initial claims declined by 23K to 206K, a zone rarely reached in the past six months. The 4-week moving average dipped 1K to 219K. Continuing Claims, meanwhile, had been on an improving trend in January but registered a third consecutive increase (17K) in this past week’s update. Overall, the data portrays a relatively steady yet non-dynamic labor market. 

Producer Price Index (PPI): The January report will update this inflation measure. The M-o-M figures are forecast to register at slightly lower levels than the month prior, with .3% increases on both headline and core readings.

Construction Spending: The delayed report for December is expected to post a .2% M-o-M rise.

Federal Reserve Bank Member Appearances:

• 2/20/2026 12:45 Dallas Fed President Logan speaks at bank regulation conference
• 2/23/2026 8:00   Fed Governor Waller speaks on economic outlook
• 2/24/2026 8:00   Chicago Fed President Goolsbee speaks on economy at NABE annual conference

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week		2/26 -- 3/3
13-Week; 26-Week	89bn; 77bn	2/23 -- 2/26
6-Week	90bn	2/24 -- 2/26
Notes	Offering Amount	Auction Date -- Settle Date
2-Year/5-Year	69bn; 70bn	2/24 -- 3/2 / 2/25 -- 3/2
7-Year	44bn	2/26 -- 3/2
FRNs	Offering Amount	Auction Date -- Settle Date
1-Year 11-Month	28bn	2/25 -- 2/27

Key Market Trends

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of late Thursday, the UST term curve was essentially within a bp or two of unchanged from a week prior. Yields had been lower to open the holiday-shortened week on Tuesday but subsequently rebounded higher. Indeed, the 5-year swap hit its lowest level, ~3.30%, since the end of November before tacking higher to trade at ~3.363% as of this writing. The market, as it did last week, again slightly 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 ~4%, down from 7% last week. The market’s end-2026 forward is ~3.07%, or two bps higher than a week ago and which equates to ~2.3 25-bps rate cuts for the rest of 2026.

Sources: Bloomberg. Weighed down by persistent concerns over affordability and construction costs, homebuilder confidence dipped again this month. Indeed, as seen here, the National Association of Homebuilders (NAHB)-Wells Fargo headline sentiment index dipped to a 5-month low of 36. A sub-50 value means more builders see conditions as poor than good. The future sales expectations and prospective buyer traffic components also fell to multi-month low points. Regionally, builder sentiment declined everywhere except the South, the U.S.’s biggest homebuilding region.

Source: Bloomberg; Mortgage Bankers Association (MBA). The tepid sentiment on the housing sector and affordability challenges is also evident in mortgage applications (RHS, % weekly change). Despite lower prevailing rates than last year, activity has fizzled in the past month after a torrid start to 2026, likely indicating that the start-of-year jump was pent-up demand after the holiday season and not the setting of a fresh trend. Possibly offering some help going forward, however, is a dip in mortgage rates this past week to ~6% as well as rising inventory for sale, both of which have improved affordability to at least some degree.

Source: Federal Reserve Bank of Atlanta. Shown here, for the NY-Newark-Jersey City, NY-NJ metro region, is the gap between actual median household income and “qualified income”, with the latter defined as the income needed for annual homeownership cost to equal no more than 30% of annual income. This gap has widened in recent years and is certainly an impediment to homeownership and affordability. Also, our metro region currently maintains a notably worse gap than the national measure. As part of our mission to help address housing affordability, the FHLB-NY recently announced that $93.8mn in housing grant funds, allocated directly from FHLB-NY earnings, are now available via the 2026 rounds of our Affordable Housing Program (“AHP”) and Homebuyer Dream Programs. For more details, please read our press release.

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday, short tenors were mixed from the week prior. The 1-week was 3 bps higher, 1-month 1bp higher, 3-month unchanged, and 6-month 2 bps lower. Some of the market indigestion from short-end supply increases in T-bills and Agency paper, a dynamic we covered a few weeks ago, has ebbed and allowed for the mostly steady advance levels. The Overnight rate did experience notable up-and-down behavior this week, owing to conditions in the financing markets and associated behavior of SOFR. As noted in the previous editions, Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have, overall, added stability to financing markets and helped to blunt any severe impacts from the higher UST and T-bill 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.
• Net issuance of UST’s and T-bills is poised to post a series of days in positive territory next week and through March 2. This dynamic, in combination with month-end, may exert pressures on liquidity and upward drift in SOFR which can impact our advance levels. Please call the desk to assess rates and to obtain color on market conditions.

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 1, 3, and 7 bps lower, respectively. Tighter funding levels assisted the downward moves in the longer advance tenors. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves 2/5/7-year auctions which will settle on March 2nd. 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.