Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending July 24, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
7/27/26 8:30	Durable Goods Orders	Jun P	1.50%	-4.50%
7/28/26 9:00	FHFA House Price Index MoM	May	--	-0.10%
7/28/26 9:00	S&P Cotality CS 20-City MoM SA	May	--	-0.04%
7/28/26 10:00	Conf. Board Consumer Confidence	Jul	92.00	91.20
7/29/26 7:00	MBA Mortgage Applications	24-Jul	--	1.90%
7/30/26 8:30	Personal Income	Jun	0.30%	0.70%
7/30/26 8:30	Personal Spending	Jun	0.40%	0.70%
7/30/26 8:30	Initial Jobless Claims	25-Jul	--	187k
7/30/26 8:30	GDP Annualized QoQ	2Q A	2.30%	2.10%
7/31/26 10:00	U. of Mich. Sentiment	Jul F	--	54.40

Economic reports this past week were on the light side and of second-tier influence. Recent improved sentiment and inflation readings have been, at least in part, due to the decline in energy prices in June. But the past two weeks have proven that the Mideast situation is clearly unresolved and fluid, thereby leaving its impact on prices potentially still intact. Indeed, energy and commodity prices have undergone a dramatic rebound higher in the past week. The upcoming FOMC meeting announcement will occur on Wednesday afternoon at 2 p.m. While the lower-than-expected CPI report this month has likely provided breathing room for the Fed to remain on hold, the turn in Mideast events will surely play a role in deliberations among Fed committee members. As of this writing Thursday afternoon, the market prices a 37% chance of a 25-bps hike at the meeting.

Durable Goods Orders: Orders are expected to post a slight MoM gain for June on both headline and ex-transport figures. The sharp headline decline last month was driven by a significant drop in aircraft orders. The fresh data is expected to not be as heavily impacted by the sector.

FHFA House Price Index MoM: Last month’s report for April posted a 2% YoY gain but a .1% MoM decline, thereby indicating continued but much slower nationwide appreciation and with significant divergence between stronger Northeast and weaker Sun Belt markets. The fresh report for May appears poised to deliver similar results.

S&P Cotality Case-Shiller Home Prices Report: The last dataset depicted ongoing home-price appreciation through April, with the National Index rising .77% MoM and the 20-City Composite up 1.03% MoM in April. May’s data may post similar results, with the market supported by limited supply but affordability pressures an ongoing obstacle to broader gains.

Conference Board Consumer Confidence: This month’s sentiment is expected to register another slight tick higher from the month prior, as consumers appeared heartened by a drop in energy prices, albeit remaining anxious about job markets. The “present situation” and expectations results will also be released.

Mortgage Applications: The headline weekly index for the week ending July 17th gained by 1.9%, after a few weekly declines in a row. The fresh reading will provide evidence of any staying power.

Personal Income & Spending: May’s data was surprisingly decent, although still-elevated PCE inflation suggested that inflationary pressures had not yet fully subsided. The June report will provide a robust dataset of updates on income, spending, and the important Personal Consumption Expenditures (PCE) inflation indicators.

Initial & Continuing Jobless Claims: Initial claims dropped by 22K in the past week’s reading, with the 4-week moving average declining by 7.25K. Continuing Claims fell by 2K. The 187K initial claims print was the lowest since 1969, and New York led the decline. The data reflects both employer reluctance to lay off workers and workers exiting the labor force.

Gross Domestic Product Q2 1st Estimate: Forecasts/”nowcasts” from various sources range between 1.7% and 2.1% annualized, indicating continued expansion but at a moderate pace.

University of Michigan Consumer Sentiment (Final): The preliminary report portrayed modest improvement, as attitudes improved and inflation expectations eased, assisted by lower gas prices earlier in the month. Yet sentiment overall remains cautious.

Federal Reserve Bank Member Appearances: The Fed will be in blackout mode before the July 29th FOMC meeting and policy announcement.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week		7/30 -- 8/4
13-Week; 26-Week	$92bln; $79bln	7/27 -- 7/30
6-Week	$95bln	7/28 -- 7/30
Notes	Offering Amount	Auction Date -- Settle Date
2-Year; 5-Year	$69bln; 70bln	7/27 -- 7/31
7-Year	$44bln	7/28 -- 7/31
FRNs	Offering Amount	Auction Date -- Settle Date
2-Year	$30bln	7/29 -- 7/31

 

Key Market Trends

Source: Bloomberg. Shown here is the Bloomberg U.S. Financial Conditions Index which tracks the overall level of financial stress in the U.S. money, bond, and equity markets to help assess the availability and cost of credit. A positive value indicates accommodative financial conditions, while a negative value indicates tighter financial conditions. Also shown is the mid-point of the Fed’s policy rate target range. The current reading on this barometer looks to be decidedly not one to dissuade the Fed from a rate hike, given that it is well outside of restrictive territory. Indeed, when this index has been at or near current levels, policy rates have tended to be either higher or in a holding pattern.

Source: FHLBNY. As seen here in Fed Funds forwards, the market has pushed rate expectations higher since the aftermath of the June FOMC meeting and considerably above the Fed’s June “dot plot” of member rate projections. The forwards have gyrated in the past month but moved notably higher in the past week upon the resumption of Mideast hostilities and higher energy and commodity prices. The latest developments have essentially led the market to price a higher and nearer path on hikes and then subsequent easing in the latter half of 2027. As of Thursday afternoon, market pricing equates to a ~37% chance of a 25-bps hike at the upcoming FOMC meeting.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve was notably higher than the week prior, as the aforementioned Mideast developments inspired a front end-led backup. The 2-, 5-, and 10-year were 15 to 22 bps higher. The 30-year, meanwhile, has traded above the 5% level for about two weeks. The market’s end-2026 Fed Funds forward is ~4.08%, 17 bps higher than a week ago and which equates to ~1.8 25-bps rate hikes for the rest of 2026. A greater chance and accumulation of hikes is priced for mid-next year, with the June 2027 FOMC forward, at 4.23%, now pricing in a cumulative 2.4 25-bps hikes. This date represents the cycle peak of rates on the forward curve, at least for the moment; please also see the previous chart for a view of the forwards.

Source: Bloomberg. There are a multitude of lines and colors here, but they all portray the common theme that yields are at the highest levels of the past year. This development may present an opportune time to put funds to work for members in that position. The 15-year MBS offers an above-5% yield with a shorter-duration profile, for instance, and bonds at below-par prices might be worth consideration. Keep in mind that the FHLBNY can be a handy resource in investment strategy and timing, as members can tactically use advances to pre-fund or “bridge-fund” securities purchases.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of Thursday morning and relative to a week ago, the short-tenor curve was higher and steeper. For instance, the 1-, 3-, and 6-month tenors were up by 3, 9, and 12 bps, respectively. The rise was mostly on account of the general rise in rates and the SOFR curve. The exception was our Overnight which declined by 6 bps; this dip was due to improvement in our funding spreads and the fact that Overnight does not cross the FOMC date and the curve’s pricing of a potential policy hike. However, on midday Thursday, a surprisingly poor 2-month T-bill auction spurred a further dramatic increase of 5 to 12 bps, led by the shorter tenors, in the short-end and in our advance rates. Investors appear cautious in front of the FOMC and facing high Bill supply. In terms of overall liquidity conditions and SOFR behavior, 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 regulatory constraints, has also benefited liquidity. Robust Money Market Fund AUM, meanwhile, has instilled funds to the short-end markets. These dynamics have helped to restrain extreme movements in SOFR.
• Net T-bill supply has made a pronounced turn into positive territory this summer, and the week ahead serves a few chunky net positive settlements in Bills and UST’s (~$71bn 7/28, ~$39bn 7/30, ~$11bn 7/31). These auction settlements, when net positive, can extract cash from the markets and thereby exert upward pressure on short-end rates and impact our shortest-tenor advance levels, as was clearly evidenced by Thursday’s midday move. GSE cash will be exiting the short-end to pay MBS coupons this week, and these dynamics should underpin SOFR. Still, overnight SOFR is expected to remain at or near the Fed’s 3.65% IORB rate. Please call the desk for updates on these dynamics.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was higher and flatter. The 2-, 5-, and 10-year rose by 19, 16, and 13 bps, respectively. 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 1 p.m. and can occasionally spur volatility around that time. Please contact the Member Services Desk for further information on market dynamics, rate levels, or products.