Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending June 05, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
6/9/26 8:15	ADP Weekly Employment Change	23-May	--	35.750k
6/9/26 10:00	Existing Home Sales	May	4.08m	4.02m
6/10/26 7:00	MBA Mortgage Applications	5-Jun	--	-2.50%
6/10/26 8:30	CPI MoM	May	0.50%	0.60%
6/10/26 8:30	Core CPI MoM	May	0.30%	0.40%
6/10/26 8:30	CPI YoY	May	4.20%	3.80%
6/11/26 8:30	Initial Jobless Claims	6-Jun	--	--
6/11/26 8:30	PPI Final Demand MoM	May	0.60%	1.40%
6/11/26 8:30	PPI Ex Food and Energy MoM	May	0.50%	1.00%
6/12/26 10:00	U. of Mich. Sentiment	Jun P	46.50	44.80

The past week’s economic reports were weighted towards the employment side of the Fed’s dual mandate, and they generally portrayed a labor market that, while not dynamic, has perhaps established a firmer footing. The “big kahuna” of labor market data, namely the Bureau of Labor Statistics’ monthly jobs report, will be released after this edition went to press and will provide further context on employment conditions. Inflation data, meanwhile, has remained elevated and fortified the Fed’s “on hold” posture. The Mideast situation remains fluid, and any meaningful developments could move the rates market. For now, markets are pricing in greater odds of a Fed rate hike by early-2027. Looking forward to next week, the inflation reports should highlight the data slate.

NY Fed Inflation Expectations: The survey report for May will reveal whether expectations have subsided from April’s elevated levels of 3.6, 3.1, and 3.0% for the 1-, 3-, and 5-year horizons.

ADP Weekly Employment: This 4-week weekly average series of private payrolls has sustained a relatively stable trend in the past two months.

Existing Home Sales: After last month’s report posted a small uptick in sales, with activity essentially flat year‑over‑year and the housing market stabilizing at low levels, the May forecast is for another small M-o-M uptick.

Mortgage Applications: The past week’s headline weekly index posted its third consecutive decline, despite a slight dip in mortgage rates. With rates tacking higher this past week, it may prove difficult to break this streak.

Consumer Price Index (CPI): After registering elevated levels last month, the May report is expected to again post heightened readings of 4.2% and 3.0% on the Y-o-Y headline. The M-o-M figures, however, are expected to post .1% declines in both headline and core (ex-food & energy). The report will also contain fresh data on real earnings which dropped last month.

Initial & Continuing Jobless Claims: Initial claims registered a 10K rise in the past week, with the 4-week moving average ticking 4.5K higher Continuing Claims, meanwhile, posted an 8K decrease from the week prior. Overall, this dataset continues to portray a relatively stable yet non-dynamic labor market.

Producer Price Index (PPI): A measure of wholesale inflation, the report posted notably elevated readings last month on both M-o-M and Y-o-Y measures. For instance, headline PPI registered readings of 1.4% and 6.0%, respectively. The core metrics were also notably high. Therefore, the May report will reveal whether the pressure is persistent or if any relief may be in store.

University of Michigan Consumer Sentiment: Following a record low reading in last month’s headline survey result, stoked partly by inflation concerns, the preliminary report for June is expected to stage a modest rebound from 44.8 to 47. Given that last week’s Conference Board Consumer Confidence index posted only a slight dip, perhaps the U of M can manage this mild bounce higher.

Federal Reserve Bank Member Appearances:

• 6/06/2026 12:00 Fed Governor Barr speaks on supervision & regulation at 5th DC Finance Conference.
• 6/06/2026 04:00 Fed’s external communications blackout through the FOMC meeting on the 17th.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	$75bn; $75bn	6/11 -- 6/16
13-Week; 26-Week	$89bn; $77bn	6/8 -- 6/11
6-Week	$65bn	6/9 -- 6/11
52-Week	$50bn	6/9 -- 6/11
Notes	Offering Amount	Auction Date -- Settle Date
3-Year	$58bn	6/9 -- 6/15
9-Year 11-Month	$39bn	6/10-- 6/15
Bonds	Offering Amount	Auction Date -- Settle Date
29-Year 11-Month	$22bn	6/11 -- 6/15

Key Market Trends

Sources: Bureau of Labor Statistics (BLS); Bloomberg; FHLBNY. This past week’s BLS Job Openings & Labor Turnover (JOLTS) report reflected some improved labor market metrics. As seen here, the Openings-to-Unemployed ratio rebounded from .9 in prior months to 1.03, the highest measure since January 2025 and thereby indicating that, while far below 2022 levels, labor market slack is on the low side. Job openings in April registered an above-expectations 731K increase, helped by a boost in professional and business services, some of which may be AI-adjacent. Market dynamism remains weak, however. Turnover declined, led by notable dips in quits, layoffs, and hiring. Indeed, hiring and separation rates posted at or near multi-year lows. This dataset, like the monthly jobs report, can be volatile, noisy, and subject to revision. Nonetheless, the latest data should solidify the Fed’s “on hold” rate posture for the near future.

Sources: Bloomberg. Also solidifying the Fed’s “on hold” posture, while also spurring increased odds in market pricing of a rate hike this year, as well as hawkish warnings from Fed members, are elevated inflation metrics. This past week, the Institute for Supply Management (ISM) released its May survey-based reports (diffusion indices) for both the manufacturing and services sector. Both reports revealed mild improvement in some activity metrics, especially the manufacturing sector which has likely been boosted by datacenter buildouts. The reports also revealed, as seen here, a continued pattern of heightened inflationary forces. While leveling off to a small degree on the manufacturing side, the ISM price indices nonetheless both remain at historically elevated levels and notably higher year-to-date. Also shown here and which can be reflective of price pressures is the Fed’s Global Supply Chain Pressure Index (GSCPI); GSCPI readings measure standard deviations from the index’s historical average. Its May reading, released this week, also posted a historically high level. Notably, the levels seen here all are on par with levels during or just after the early-decade pandemic.

Sources: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of late Thursday afternoon, the UST term curve was modestly changed from the week prior, with most tenors a few bps higher. As can be seen here, yields remain well above the year-to-date lows of end-February. The market’s end-2026 Fed Funds forward is ~3.78%, roughly the same as a week ago, which equates to ~65% chance of one 25-bps rate hike for the rest of 2026. A greater chance of hikes is now priced by early next year, with the March 2027 forward, at 3.88%, now pricing in a full hike by then. Overall, the front-end forwards remain relatively flat and are fluctuating with the latest news and rate moves.

Sources: Bloomberg. A shift since mid-May to positive net issuance in T-bills has cheapened T-bill valuations, as seen here in the spread between the 3-month SOFR swap and 3-month T-bill. Since the third week of May, T-bills have cheapened ~5.5 bps relative to swaps. Basically, SOFR swaps have traded in a tighter sideways range, whereas T-bills have risen ~6.5 bps. Given that our paper tracks these markets, these dynamics have spurred widening in our funding spread which, in turn, has led to slightly higher advance rates. For instance, since May 21st, our 3-month fixed rate is 4 to 5 bps higher, and our 3-month Floater advance spread is, similarly, ~5 bps higher. All in all, the moves have been relatively mild and could subside after mid-June when T-bill supply is expected to ease; kindly refer to the next section for further short-end color.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday and relative to a week ago, short tenors were generally unchanged, with a few tenors either up or down by a bp. Per color in our previous section, positive net T-bill supply has weighed on T-bill valuations and spurred slight widening in our funding spreads. But overall liquidity and funding conditions have been healthy and relatively steady. Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have continued to grease stability in financing markets and help blunt reactions to any net positive UST and T-bill issuance and/or month and quarter-end periods. Money Market Fund AUM, meanwhile, has rebounded from its April tax date-related dip to a record-high this week, thereby instilling funds to the short-end markets.
• The week ahead is light on net T-bill or UST settlements, although a $79bn net-positive UST settlement looms for the 15th. Since the 15th is also the corporate tax due date, there could be some upward pressure on financing rates near or on the date. These net settlements, when positive, can extract cash from the markets and thereby exert upward pressure on short-end rates. However, net T-bill issuance is expected to turn negative mid-month and into July. Moreover, GSE cash should enter the short-end markets mid-month as a placeholder prior to subsequent MBS coupon payments. While SOFR may endure upward pressure, it is expected to be contained to or near the 3.65% IORB rate.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was up by 2 to 3 bps from a week ago. 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. 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.