Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending June 18, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
6/23/26 8:15	ADP Weekly Employment Change	6-Jun	--	25.500k
6/23/26 9:45	S&P Global US Manufacturing PMI	Jun P	54.80	55.10
6/24/26 7:00	MBA Mortgage Applications	19-Jun	--	-3.80%
6/24/26 10:00	New Home Sales	May	640k	622k
6/24/2026	Building Permits	May F	--	1,413k
6/25/26 8:30	Personal Income	May	0.40%	0.00%
6/25/26 8:30	Personal Spending	May	0.50%	0.50%
6/25/26 8:30	Initial Jobless Claims	20-Jun	--	226k
6/25/26 8:30	GDP Annualized QoQ	1Q T	1.60%	1.60%
6/26/26 10:00	U. of Mich. Sentiment	Jun F	--	48.90

The past week’s economic reports were mixed and overshadowed by the FOMC outcome. A set of housing reports sent somewhat contradictory signals, as housing starts were weak but pending home sales registered a solid improvement. Retail sales revealed that consumers were “hanging in” but likely draining savings to do so. The market treated the FOMC as a hawkish surprise, and rates pushed higher in response. The last sentence of the streamlined FOMC statement captured the tone of the outcome and market’s reaction: “The Committee will deliver price stability.” Indeed, new Fed President Warsh seemingly sought to portray independence and inflation-fighting credibility. The fresh “dot plot”, meanwhile, revealed a skew towards rate hikes. The Mideast conflict appears to have reached a resolution, and this development likely helped to contain a further breakout higher in rates.

S&P Global Purchasing Managers Indices (PMI): The updated set of reports will provide context on sentiment and conditions within the manufacturing and services sectors.

Mortgage Applications: The past week’s headline weekly index fell 3.8%, after the prior week’s 10.8% gain, driven by lower refinancings and purchases.

New Home Sales: Sales fell 6.2% M-o-M to 622K in April, with rising inventories (9.4 months supply) signaling softer demand despite firm median pricing. The fresh release will report May’s data.

Building Permits: The preliminary figure for May slipped .7% to 1.41mn, with weakness concentrated in multifamily. This week’s final number is expected to confirm a flat-to-soft trend.

Personal Income & Spending: Last month’s data revealed flat income but a .5% M-o-M increase in spending, thereby signaling that consumers are increasingly dipping into savings to maintain spending patterns. Real spending was up only .1%, given the .4% rise in the PCE Price index. For May, a similar report portraying relatively resilient nominal spending, pressure on real income, and sticky inflation, is anticipated. Note that the PCE price data is a favorite barometer of the Fed.

Initial & Continuing Jobless Claims: Initial claims registered a 1K rise in the past week, with the 4-week moving average ticking ~4.2K higher. Continuing Claims, meanwhile, posted a ~10K increase from the week prior net or prior-week revisions. This dataset has generally been trending sideways and with little market impact.

GDP Report: This release will represent the third and final estimate for Q1. The prior estimate revealed annualized growth of 1.60%, with the price index at a relatively elevated 3.5%.

University of Michigan Consumer Report: This release will finalize the preliminary June report from last week. The preliminary headline index of 48.9 was still low but at least improved from the record-low reading of 44.8 in May. Sentiment on current conditions, expectations, and inflation will be included in the update.

Federal Reserve Bank Member Appearances:

• 6/25/2026 15:40 NY Fed's Williams gives keynote remarks at event.
• 6/25/2026 18:30 Chicago Fed's Goolsbee participates in moderated discussion at Chicago Council on Global Affairs event.
• 6/26/2026 11:30 Minneapolis Fed's Kashkari appears in Aspen Ideas Panel.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	$70bn; $75bn	6/25 -- 6/30
13-Week; 26-Week	$89bn; $77bn	6/22 -- 6/25
6-Week	$65bn	6/23 -- 6/25
17-Week		6/24 -- 6/30
Notes	Offering Amount	Auction Date -- Settle Date
2-Year; 5-Year	$69bn; $70bn	6/23; 6/24 -- 6/30
7-Year	$44bn	6/25 -- 6/30
FRNs	Offering Amount	Auction Date -- Settle Date
1-Year 10-Month	$28bn	6/24 -- 6/26

 

Key Market Trends

Source: Bloomberg. The past week delivered some mixed news on the housing front, as shown here. Housing starts, a measure of broken ground on new private housing units, posted a sharp downside miss to expectations ,led by multifamily weakness. Registering a 15.4% M-o-M decline for May and a 1.18mn seasonally adjusted annual rate, it was the largest decline since early-2024. However, pending home sales for May rebounded strongly, with a 3.8% M-o-M gain, the largest since end-2023. The pending home sales figures suggest possible improvement ahead in demand and a pickup in existing home sales, especially if prevailing mortgage rates become more acceptable to buyers. Overall, the housing sector remains challenged and suffering from poor sentiment, but signs are possibly emerging of a potential shift from a downside bias to one of flat-to-stabilizing.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve was flatter from the week prior. The FOMC outcome was the main driver of changes. While the 2-year rose ~12 bps, the 5-year rose by ~3 bps. The 10-year was virtually unchanged on the week, and longer tenors fell by close to 5 bps. The market’s end-2026 Fed Funds forward is ~4.03%, ~20 bps higher than a week ago and which equates to ~1.6 25-bps rate hikes for the rest of 2026. A greater chance of hikes is now priced into early next year, with the April 2027 forward, at 4.11%, now pricing in a cumulative 1.9 25-bps hikes. The market’s pricing is a bit more aggressive than the Fed’s median dots. For instance, while the market is ~4.03% for this December, the Fed’s end-2026 dot is 3.75%, although a handful of Fed projections are well above this level at 4.125%.

Source: Bloomberg. The FOMC outcome added further fuel to the yield curve flattening of recent months. Shown here is the 2-year vs. 10-year curve year-to-date. The flattening has been led by the rise in 2-year yields, as the market has priced a higher rate path into the curve. The FOMC’s focus on inflation, in combination with a decidedly higher dot plot, prompted the market to immediately push shorter-tenor rates notably higher post-FOMC release. The 2-year rose ~15 bps, although it has retraced a few bps since Wednesday’s close. Longer tenors reacted in a more sideways-to- unchanged fashion to the FOMC outcome. The Fed’s stern focus on inflation appears to have provided the market with comfort that the Fed is “on the case”; indeed, inflation swap levels and inflation “Breakevens” in TIPS have receded, and these dynamics have helped to contain longer-tenor yields.

Source: JP Morgan. Shown here is weekly privately-held net issuance ($bn) of T-bills, historical and JP Morgan research projections. The transition to net-negative issuance this month has helped to keep conditions calm in financing markets. Indeed, except for the 15th when a large UST coupon settlement coincided with corporate tax-due day, SOFR has steadily remained at or below the 3.65% Interest on Reserves Balance rate. In turn, these conditions have led to less volatility in FHLBNY’s shortest-tenor advance rates. In Q3, most of the T-bill issuance is forecast to be concentrated in the back-half of July and August. At this stage, short-end markets appear poised to navigate that period without major hiccups, but it is advisable to monitor conditions when closer to that timeframe. Further color on short-end markets can be found in the following section herein.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday and relative to a week ago, short tenors were mixed. The 2-week-and-in sector dipped by a bp or two, as short tenors benefited late in the week from softer financing/SOFR conditions and a slight improvement in our funding spreads, dynamics that were helped by net T-bill supply turning negative. 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. Improved dealer intermediation, via lighter expected regulatory constraints, has also benefited liquidity. Money Market Fund AUM, meanwhile, may be bolstered by this week’s higher rates, thereby instilling funds to the short-end markets. GSE cash, moreover, enters the short-end markets near-term as a placeholder prior to subsequent MBS coupon payments on the 25th.
• This past Monday’s $79bn net-positive UST settlement, in combination with corporate tax date, spurred some mild indigestion in financing markets. SOFR rose 10 bps from the 10th to the 15th, and our Overnight rate behaved in similar fashion. These net settlements, when positive, can extract cash from the markets and thereby exert upward pressure on short-end rates. But rates subsequently and quickly subsided and conditions turned benign. Furthermore, net T-bill issuance has turned negative and is expected to remain so into July. Dates to be aware of, in terms of potential upward short-end pressure, are the 26th and 30th when net-positive UST coupon settlements are slated to occur in combination with quarter-end.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was notably flatter versus the week prior. The 2- and 5-year rose by 9 and 1 bp, respectively, whereas the 10-year declined by 3 bps. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves a slate of 2/5/7-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.