Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending April 10, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
4/13/26 10:00	Existing Home Sales	Mar	--	4.09m
4/14/26 6:00	NFIB Small Business Optimism	Mar	--	98.80
4/14/26 8:15	ADP Weekly Employment Change	28-Mar	--	26.000k
4/14/26 8:30	PPI Final Demand MoM	Mar	--	0.70%
4/15/26 7:00	MBA Mortgage Applications	10-Apr	--	-0.80%
4/15/26 8:30	Empire Manufacturing	Apr	--	-0.20
4/15/26 10:00	NAHB Housing Market Index	Apr	--	38.00
4/16/26 8:30	New York Fed Services Business Activity	Apr	--	-22.60
4/16/26 8:30	Initial Jobless Claims	11-Apr	--	219k
4/16/26 9:15	Industrial Production MoM	Mar	--	0.20%

The past week was largely dictated by Mideast war news, with news of a ceasefire prompting a rebound in stock and bond prices and a decline off the recent highs in oil prices. The release of the FOMC Minutes from the March 17-18 meeting underscored that the Mideast conflict has complicated the Fed’s already-cautious stance on further rate cuts. The Minutes revealed that officials are concerned that a moderation in inflation could be delayed because of tariffs, oil prices, and the risk that years of above-target inflation has made consumers and businesses more accustomed to price increases. The Minutes underscored increasingly two-sided risks, namely the upside risks to inflation and downside risks to employment, as well as the uncertainty of Mideast impacts which should continue to be the dominant driver of markets.

Existing Home Sales: The National Association of Realtors’ release for March will reveal if sales are able to improve upon February’s M-o-M seasonally adjusted annual rate gain of 1.7%. Last month’s report also included a slight improvement in its affordability index. However, the increase in rates in March may have hindered any improvements.

NFIB Small Business Optimism: The index fell .5 points in February to 98.8 but remained slightly above the 52-year average of 98. The Uncertainty Index decreased three points from January to 88. The fresh report will reveal if the Mideast Conflict and its impact on rates and costs has had a measurable effect yet.

ADP Weekly Employment Change: This barometer of private payrolls, a 4-week moving average, has posted slight improvements in recent weeks.

Producer Price Index (PPI) report: Last month’s figures were well above the Fed’s target, and developments over the past month may have only firmed this status on wholesale prices.

Mortgage Applications: The past week’s headline index registered its fourth consecutive decline, albeit a modest one, as a 2.8% dip in refinancings was offset by a 1.1% increase in purchase applications. Applications have clearly been impacted by the rise in rates over the past six weeks.

Empire Manufacturing Survey Index: Last month’s general index posted at -.2, or slightly in the sub-0 contractionary zone; the fresh report may reveal negative impacts from the Mideast conflict.

NAHB/Wells Fargo Housing Market Index: At 38, the prior print was in the sub-50 pessimistic zone. Given the past month’s events, it would appear doubtful that sentiment has improved much.

New York Fed Business Leaders Survey: Last month’s report, covering survey responses collected between March 2 and 9, indicated a continued weakening in the NY-Northern NJ region’s services sector. This trend may remain intact for now.

Initial & Continuing Jobless Claims: Initial claims jumped by 16K in the past week, with a slight increase in the 4-week moving average. Overall, this dataset continues to portray a relatively steady yet non-dynamic labor market.

Industrial Production & Capacity Utilization: Production posted a .2% M-o-M gain last month, while Utilization remained at the 76.3% level. Again, the release will reveal any impacts from the conflict.

Federal Reserve Bank Member Appearances:

• 4/15/2026 14:00 Fed releases Beige Book Summary of Commentary on Current Economic Conditions by Fed District.
• 4/16/2026 08:35 NY Fed President Williams gives keynote remarks at FHLB-NY event.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	$80bn; $75bn	4/16 -- 4/21
13-Week; 26-Week	$89bn; $77bn	4/13 -- 4/16
6-Week	$70bn	4/14 -- 4/16
52-Week	$50bn	4/14 -- 4/16
Notes	Offering Amount	Auction Date -- Settle Date
No scheduled Note offerings.
Bonds	Offering Amount	Auction Date -- Settle Date
No scheduled Bond offerings.

Key Market Trends

Source: Bloomberg. This past Thursday morning, the Fed’s favored inflation barometer, namely Personal Consumption Expenditure Price Index (“PCE”) was released and again revealed inflation to be well above the Fed’s target. Shown here are the core-PCE ex-food & energy M-o-M and Y-o-Y measures over time. The PCE has risen to more concerning levels in recent month, after some moderation in H2 2025. Moreover, note that the latest reading of .37% (.4% rounded) is for February and so does not include any ramifications from the Mideast conflict, and ramifications are more likely to be upward pressure. Meanwhile, there are emerging signs of delayed feed-through into consumer prices from tariffs. Given the Fed’s target/goal of 2% inflation and current metrics above that, the Fed is treading cautiously and marking time on rate policy until clearer conditions prevail. Note that the Consumer Price Index (“CPI”), another important inflation barometer, is to be released just prior to this publication hitting inboxes.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of late Thursday, the UST term curve was a few bps lower in most tenors from a week ago. While the mid-week news of a Mideast ceasefire sparked a reflexive move lower in yields, the uncertainty of its duration and stability led yields to bounce higher from the week’s lows. For example, after hitting ~3.70% early-Wednesday, the 2-year traded ~3.775% as of this writing. While yields have retraced from the recent highs of two weeks ago, they are still ~40 bps higher in the 2-to-5-year sector from end-February before the Mideast conflict. The market’s end-2026 forward is ~3.56%, or 2 bps lower than a week ago and which equates to ~31% chance of one 25-bps rate cut for the rest of 2026. A 100% chance of a 25-bps cut is now priced by October 2027.

Source: Bloomberg. The month of March experienced a dramatic rise in rates, and, as a result, spurred a notable increase in mortgage rates, as seen here in the behavior of the Optimal Blue 30-year Conforming Mortgage index. However, also as seen here, the rise in mortgage rates could have been even more extreme without the narrowing in March of the Primary-to-Secondary mortgage spread which is the spread between the primary borrower’s rate and the coupon/rate on a par-priced MBS. This narrowing was likely led by a reduction in fees, as originators aimed to sustain business pipelines. Indeed, as seen here, the primary mortgage rate index was contained to below the 6.50% level.

Source: Bloomberg. Not to jinx it, but, as seen here, SOFR has managed to trend and sustain near or below Fed Funds Effective in recent weeks. Indeed, this week the “Fed Funds minus SOFR” spread hit the highest level since last July, All else equal, this condition makes theoretical sense, given that Fed Funds, unlike SOFR, is an unsecured rate and so should trade above SOFR. But last year’s dynamics of a debt ceiling impasse and then heavy net-positive issuance of USTs and T-bills spurred extreme moves in short-term financing markets. The dynamics bled into our short-term advance rates which experienced notable volatility. But financing markets are now calmer, assisted by a recent moderation in net T-bill supply. Importantly, Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases (RMP) program have also added stability to markets and helped to blunt any severe reactions to any net positive UST and T-bill issuance and/or month and quarter-end periods. 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 recent market volatility has also boosted cash positions among investors. A monkey wrench to the recent trend should be noted for April 15th, however, when a slug of net-positive UST settlements occur along with tax day. But any “indigestion” and upward pressure on SOFR from cash leaving the system that day is expected to be contained and short-lived.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday and relative to last week, short tenors were lower by 2 to 3 bps. The market’s mild repricing of potential Fed-easing helped the move, along with our issuance levels improving a tad. Meanwhile, financing markets remain calmer compared to late-2025, assisted by the recent moderation in net T-bill supply. Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have also, overall, added stability to financing markets and helped to blunt any severe reactions to any net positive UST and T-bill issuance and/or month and quarter-end periods. 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 week ahead appears benign, in terms of overall UST and T-bill net settlements which, when positive, can take cash out of the markets and thereby exert upward pressure on short-end rates. There is a net-positive $48bn UST coupon settlement on the 15th, and, in tandem with the tax date the same day, may exert some stress. However, the above-mentioned mitigants should help to prevent dramatic or enduring impacts on rates.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was 3 to 5 bps lower from the week prior. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves 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.