Member Services Desk Weekly Market Update

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

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
3/16/26 8:30	Empire Manufacturing	Mar	3.90	7.10
3/16/26 9:15	Industrial Production MoM	Feb	0.20%	0.70%
3/16/26 9:15	Capacity Utilization	Feb	76.20%	76.20%
3/16/26 10:00	NAHB Housing Market Index	Mar	37.00	36.00
3/17/26 10:00	Pending Home Sales MoM	Feb	-1.00%	-0.80%
3/18/26 7:00	MBA Mortgage Applications	13-Mar	--	3.20%
3/18/26 8:30	PPI Final Demand MoM	Feb	0.20%	0.50%
3/19/26 8:30	Initial Jobless Claims	14-Mar	--	--
3/19/26 10:00	New Home Sales	Jan	725k	745k
3/19/2026	Building Permits	Jan F	--	1,455k

The ongoing Mideast conflagration remains the main event for markets. As of this writing, rates have notably rebounded from the multi-month lows of end-February. See herein for context and color. The key event of the upcoming week should be the FOMC meeting and policy decision. While no change in rates is the universal expectation, the Fed’s updated quarterly Summary of Economic Projections (SEP) will also be reviewed by market participants. The SEP provides Fed members’ projections on growth, inflation, employment, and rates (aka “dot plot”). Given the outbreak of the Mideast conflict, the FOMC statement and Chair Powell’s post-meeting press conference will surely address the topic, although the feedback may be of the “too-soon-to-tell-with-elevated-uncertainty” variety on its lasting impacts. The market’s pricing of the Fed has shifted notably; please see herein for more information.   

Empire Manufacturing: Activity in NY state has increased modestly in the past few months, according to the survey. It is forecast to slip to 3.9 from 7.1 and thereby slightly remain in positive territory. 

Industrial Production and Capacity Utilization: The February readings are expected to post a modest .2% gain in production output, while the utilization rate is forecast to remain steady at 76.2% which is ~3% below its long-run 1975-2025 average.  

NAHB/Wells Fargo Housing Market Index: The headline index gauge of the single-family housing market is expected to improve slightly from last month, but builder confidence remains solidly below the 50-demarcation line of less optimism vs. greater optimism.

ADP Weekly Employment: This 4-week moving average barometer of private payrolls has printed at 15.5K the last two weeks, and its trend has improved since January, portraying a steady state.

Pending Home Sales: A forward-looking indicator on housing, contracts-in-place on existing dwellings in February are expected to post a 1% M-o-M drop, as slight improvements in affordability have yet to meaningfully impact data. Regional readings will also be released and will reveal whether the Northeast can improve on its 5.7% decrease last month. 

Mortgage Applications: Given the start of the spring homebuying season, increased activity was potentially on the horizon. But the past week’s headline index decelerated and posted a 3.2% gain following the prior week’s 11% gain, possibly negatively impacted by the rise in rates of the past two weeks.  

Producer Price Index: The headline and core M-o-M readings for February are forecast to moderate from last month’s lofty prints but nonetheless remain above the Fed’s desired inflation range.  

Initial & Continuing Jobless Claims: Initial claims in the last week remained steady via a 1K weekly decrease to 213K . The 4-week moving average again dipped slightly to 212K, and Continuing Claims essentially held steady on the week. Overall, the data continues to portray a relatively steady yet non-dynamic labor market. 

New Home Sales: January sales are expected to register a 2.7% M-o-M decrease, generally reinforcing the theme of ongoing modest and mixed housing data.

Building Permits: The final revision for January’s data will be released after this past week, posting a 5.45% preliminary M-o-M decline, which was a retreat from December’s surprising seasonally adjusted annual gain of 4.8%.

Federal Reserve Bank Member Appearances:

• 3/18/2026 14:00 FOMC decision to be followed by the Chair Powell press conference.

Bonds Offering Amount Auction Date -- Offer Date

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	100bn; 90bn	3/19 -- 3/24
13-Week; 26-Week	89bn; 77bn	3/16 -- 3/19
6-Week	85bn	3/17 -- 3/19
52-Week	50bn	3/17 -- 3/19
Notes	Offering Amount	Auction Date -- Settle Date
9-Year 10-Month	19bn	3/19 -- 3/31
19-Year 11-Month	13bn	3/17 -- 3/31

Key Market Trends

Source: Bloomberg. Recent housing data has generally been mixed, and affordability remains an ongoing issue, especially for lower-income cohorts. Yet, homebuyer sentiment has been on an improving trend, albeit still well underwater. As seen here via the University of Michigan’s monthly consumer survey for February, the net percentage of consumers deeming homebuying conditions as favorable vs. unfavorable had climbed to -54 from a low of -77 in 2024. Naturally, lower mortgage rates, along with a deceleration in price increases, have underpinned the modest improvement in sentiment. In that regard and shown here, the recent mini-spike in mortgage rates could prove an untimely, given the onset of the spring home-sale season, impediment to improving sentiment and activity. Note that with the market’s MBS Current Coupon moving even higher as this publication goes to press, mortgage rates could be poised to push a bit higher than here.

 

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of late Thursday, the UST term curve was 12 to 15 bps higher than last Thursday. As seen here, the curve is notably higher than the multi-month lows reached at the close of February. The Mideast conflict and market repositioning have prompted the move. Government spending on the war and potential tariff refunds, both of which can serve to increase the government debt and UST issuance, also appear to be in the mix as drivers of rate moves. This past week also served a near-record weekly amount of investment-grade debt issuance, led by Amazon’s $37bn offering, thereby adding supply pressure to the rates market. Option volatility, as well as mortgage and corporate bond spreads,  rose again on the week. As of Thursday afternoon, the market prices zero chance of a 25-bps Fed ease at next week’s FOMC meeting. The market’s end-2026 forward is ~3.46%, 21 bps higher than a week ago, which equates to less than one 25-bps rate cuts for the rest of 2026.

 

Source: FHLBNY. Leading into the upcoming week’s FOMC meeting, here we compare current market pricing (via Fed Funds forward swaps as of late Thursday afternoon) of the Fed’s prospective path on rate policy relative to that at the time of the January FOMC. It’s interesting that the January 2028 forwards are nearly identical, but the path to get there has clearly been repriced.  Essentially, over the past six weeks, the market has pushed out the timeline of rate cuts. At the end of January, the market priced for just shy of two 25-bps cuts in 2026, with a full chance of the first cut by summer. It now prices for less than one 25-bps, or, in other words, ~71% chance of one cut in 2026. Moreover, current pricing does not incorporate ~100% probability of a 25-bps cut until summer 2027. While the market had, over recent weeks, gradually pushed out the timeline of potential Fed rate cuts, the move markedly accelerated this week on continued reverberations of the Mideast conflict and potential inflationary impacts.  

 

Source: Barclays Research. As seen here, net T-bill issuance has entered an inflection point in which net issuance to private (ex-Fed) investors is anticipated to moderate and subsequently turn negative into April and throughout springtime, as Treasury prepares for tax-receipt season. Much like in early-January when net issuance (LHS, $bn) was negative, this dynamic can serve to improve T-bill and our issuance levels, which, in turn, and all else equal, benefits our advance rates. Net supply to private investors has been reduced via the Fed’s Reserve Management Program (RMP), $40bn/month T-bill purchases, as well as its ~$15bn/month MBS principal reinvestments into T-bills. Roughly 75% of the Fed’s T-bill purchases have been in the 1-to-4-month sector, thereby providing this region with greater relative support.  

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday and compared to a week ago, short tenors were lower by a bp or two in the 1-month and-out sector and lower by two to five bps, led by Overnight, in the shortest tenors. A moderation in net T-bill supply has helped to quell indigestion in financing markets while also slightly improving spreads on our issuance. Despite a few days of positive net T-bill supply this past week, the impact has been negligible, as 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 reactions to net positive UST and T-bill issuance. Moreover, net issuance is anticipated to enter a more benign period in the spring. Money Market Fund AUM, meanwhile, remains at high levels, has absorbed short-end paper and repo demand, and thereby assisted as a stabilizer.             
• Potential pressure in financing markets could occur this coming Monday, which is the settlement date for a large slug of net-positive UST issuance, but effects, if any, are likely to be short-lived and contained to the very short and Overnight tenors.    

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was higher by 10 to 16 bps from the week prior, with the 2- to 7-year zone leading the move. Please refer to the previous section for color for color on market dynamics and changes. 
• On the UST term supply front, the upcoming week serves a 20-year nominal and a 10-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.