Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending May 08, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
5/11/26 10:00	Existing Home Sales	Apr	4.05m	3.98m
5/12/26 6:00	NFIB Small Business Optimism	Apr	96.00	95.80
5/12/26 8:15	ADP Weekly Employment Change	25-Apr	--	39.250k
5/12/26 8:30	CPI MoM	Apr	0.70%	0.90%
5/13/26 7:00	MBA Mortgage Applications	8-May	--	-4.40%
5/13/26 8:30	PPI Final Demand MoM	Apr	0.50%	0.50%
5/14/26 8:30	Initial Jobless Claims	9-May	--	200k
5/14/26 8:30	Retail Sales Advance MoM	Apr	0.40%	1.70%
5/15/26 8:30	Empire Manufacturing	May	8.00	11.00
5/15/26 9:15	Industrial Production MoM	Apr	0.20%	-0.50%

The Mideast situation remains fluid, and fresh developments are prone to move the rates market. The past week’s data was not very influential but continued to portray a relatively steady, albeit non-dynamic, labor market and ongoing potential inflation pressures. The jobs report to be released just prior to this edition hitting inboxes may, if considerably off consensus expectations, move rates. Looking forward to next week, the inflation data will be closely scrutinized by the markets.

Existing Home Sales: The April number is expected to post a slight rebound from March, when sales fell by 3.6% to an annualized rate of 3.98mn, hitting a 9-month low. Despite lower sales, the median home price increased by 1.4% from the previous year to $408.8K, and so the fresh data will also reveal if further price-rise deceleration is afoot.

NFIB Small Business Optimism: Impacted by the uncertainty component, last month’s headline index reading of 95.8 was the lowest since April 2025 and below the 52-year average of 98.

ADP Weekly Employment: This 4-week weekly average series of private payrolls has been on an improving trend in the past month.

Consumer Price Index (CPI): The headline gauge is forecast to register a .7% M-o-M gain which would improve on last month’s .9%, but the core is expected to post a .3% M-o-M gain or .1% higher than last month. The Y-o-Y readings are expected to remain well above the Fed’s desired 2% goal and thereby serve as reasoning for its “on hold” posture.

Mortgage Applications: The past week’s headline weekly index posted a 4.4% dip, worsening from the prior week’s 1.6% drop.

Producer Price Index (PPI): While not garnering as much attention as CPI, the PPI will provide context on price pressures at the wholesale level in April. Pressures are expected to remain elevated.

Initial & Continuing Jobless Claims: Initial claims registered an 11K increase this past week, with a modest 4.25K decline in the 4-week moving average. Continuing Claims, meanwhile, maintained a downward trend. Overall, this dataset continues to portray a relatively stable yet non-dynamic labor market.

Retail Sales: Sales in April, including the core ex-food & gas tally, are expected to slow from the month prior. The report’s numbers are not adjusted for inflation, and so the data will be parsed for clues on consumer buying patterns.

Industrial Production & Capacity Utilization: The April measures of output and activity are expected to improve upon March’s M-o-M declines.

Federal Reserve Bank Member Appearances:

• 5/08/2026 19:30 Fed’s Waller, Bowman, Daly and Goolsbee on panel at Hoover Institution Monetary Policy Conference.
• 5/12/2026 13:00 Chicago Fed President Goolsbee speaks at Greater Rockford Chamber of Commerce.
• 5/13/2026 11:30 Boston Fed President Collins speaks on US Economy at Boston Economic Club.
• 5/14/2026 13:00 Cleveland Fed President Hammack gives opening remarks at Bank’s monthly press conference.
• 5/14/2026 17:30 Fed Governor Barr speaks at Money Marketeers event in NYC.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	$90bn; $85bn	5/14 -- 5/19
13-Week; 26-Week	$89bn; $77bn	5/11 -- 5/14
6-Week	$80bn	5/12 -- 5/14
52-Week	$50bn	5/12 -- 5/14
Notes	Offering Amount	Auction Date -- Settle Date
3-Year	$58bn	5/11 -- 5/15
10-Year	$42bn	5/12 -- 5/15
Bonds	Offering Amount	Auction Date -- Settle Date
30-Year	$25bn	5/13 -- 5/15

Key Market Trends

Sources: FRBNY; Bureau of Labor Statistics; Harper Petersen Holding GmbH; Baltic Exchange; IHS Markit; Institute for Supply Management; Haver Analytics; Refinitiv; FHLBNY. Shown here is the NY Fed’s Global Supply Chain Pressure Index (GSCPI) which utilizes various sources to construct a comprehensive and condensed summary of supply chain dynamics. The GSCPI readings measure the number of standard deviations from the index’s historical average. As can be seen here, the index has moved notably higher in recent months. Indeed, the measure is at a historically high level if/when ignoring the pandemic years of early this decade. These pressures can bleed into costs and prices, and the Mideast conflict has likely added to supply constraints and some of the upward price pressures already revealed in data. Economists and the Fed surely will monitor this dynamic and its impact on inflation.

Source: Bloomberg. Regarding datasets already reflecting inflationary pressures, the Institute of Supply Management (ISM) Purchasing Managers’ Indices are squarely in that cohort. Shown here are the most recent readings (the indices are surveys and diffusion-based) on the ISM-Manufacturing and ISM-Services Prices Indices; both reflect upward trends this spring. The former has clearly posted the more dramatic increase. It is data of this nature that is surely underpinning the Fed’s cautionary “wait and see” posture on rate policy.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of late Thursday afternoon, the UST term curve was again modestly changed from the week prior, with the 2- and 3-year up by ~4 bps to lead the move. The markets experienced a bit of whipsaw action via developments in the ongoing Mideast situation. Option volatility jumped to start the week but subsequently subsided on news of a potential framework to reopen the Strait of Hormuz. In sum, the situation remains tenuous and fluid. In terms of the curve’s 3-month range, yields are a bit lower than the highs of March 26th but remain well above the levels of February 27th. For instance, the 2-year closed February at 3.38% and is now at 3.90% as of this writing. The market’s end-2026 Fed Funds forward is ~3.675%, ~5 bps higher than a week ago and which equates to ~14% chance of one 25-bps rate hike for the rest of 2026. A greater chance of hikes is now priced into early next year, with the April 2027 forward, at ~3.74%, currently pricing a ~39% chance of a 25-bps hike. Overall, the front-end forwards are relatively flat and “see-sawing” with the latest news and rate moves.

Sources: FHLBanks Office of Finance; FHLBNY. April was a notable month for FHLBank System activity. Shown here is the trend in FHLBank System debt outstanding as well as M-o-M changes thereof. At just over $100bn, the month registered one of the highest net changes of the past 15 years. Indeed, excepting periods of financial system stress during the pandemic and March 2023, April’s increase ranks as even more notable. Since issuance and advance demand are highly correlated, the latter also experienced a notable rise for the month. The activity was not all that surprising, given seasonal trends during tax season. During April, bank deposits experienced a decline while loans/leases/credit posted a slight uptick; consequently, loan-to-deposit ratios increased in the banking sector. As the Treasury’s General Account rose, bank reserves fell over the month. These seasonal patterns in activity illuminate the FHLBanks’ ability to nimbly expand or contract to provide members with prompt, on-demand liquidity for asset & liability management and in support of housing, local community development and financial stability.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday and relative to last week, short tenors were modestly mixed from the week prior. Overnight rose by 2 bps, while the 2-month-and-in sector was a bp higher or unchanged. The 3- to 6-month tenors dipped by a bp. While elevated System issuance (see prior section herein) in the past two weeks has spurred some widening in our funding spreads, the overall changes have been contained to a narrow zone with the help of short SOFR swaps, as of this writing, having ebbed to below Fed Funds Effective. Overall, financing markets remain calmer than those of late-2025, assisted by the moderation in net T-bill supply over the past two months. Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have also 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 has decreased in the past month during tax season but is anticipated to soon mount its usual post-tax date rebuild and thereby help conditions.
• The week ahead contains a few days of net positive UST/T-bills settlements; most are modest sums except for $41.7bn on the 15th. These net settlements, when positive, can extract cash from the markets and thereby exert upward pressure on short-end rates. But conditions are expected to remain relatively placid in the weeks ahead.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was modestly higher and flatter from a week ago. The 2- to 5-year sector was 3 to 5 bps higher, while longer tenors were up to a lesser degree. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves 3/10/30-year auctions each settling on the 15th. 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.