Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending August 7, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
8/11/26 6:00	NFIB Small Business Optimism	Jul	97.10	97.40
8/11/26 10:00	Existing Home Sales	Jul	4.07m	4.09m
8/12/26 7:00	MBA Mortgage Applications	7-Aug	--	-2.90%
8/12/26 8:30	CPI MoM	Jul	0.20%	-0.40%
8/12/26 8:30	CPI YoY	Jul	3.40%	3.50%
8/13/26 8:30	Initial Jobless Claims	8-Aug	--	199k
8/13/26 8:30	PPI Final Demand MoM	Jul	0.20%	-0.30%
8/13/26 8:30	PPI Final Demand YoY	Jul	4.90%	5.50%
8/14/26 8:30	Retail Sales Advance MoM	Jul	0.30%	0.20%
8/14/26 10:00	U. of Mich. Sentiment	Aug P	54.10	55.20

Economic reports this past week were generally mixed and limited in impact. The ADP monthly private jobs report posted well below expectations, but Friday’s BLS monthly jobs report, to be released just before this publication reaches inboxes, has greater influence on markets and the Fed. Lingering price pressures, meanwhile, remain evident in data releases. Apparent progress on a partial agreement in the Mideast conflict spurred a slight drop in yields through mid-week. But the situation remains decidedly fluid, thereby leaving its potential impact on inflation still intact. However, at this stage, the market reaction function has decreased unless and until actual agreements take hold. Looking beyond the Friday morning jobs report, the week ahead data-wise is quieter and of a more second-tier nature.

NFIB Small Business Optimism Survey: Last month’s report for June rose to just shy of the long-run average of 98. The report’s overall improvement was notable, although prices, interest rates and labor shortages remained as constraints. The report for July will update sentiment in the sector.

Existing Home Sales: The June result posted a 2.4% MoM decline, although the YoY metric was a 2.8% increase. While mildly softer, the report portrayed a stable housing market, though still constrained by affordability issues and higher rate levels. The results for July appear likely to be similar.

Mortgage Applications: The headline weekly index for the week ending July 31st fell 2.9%. Both purchases and refis registered declines.

Consumer Price Index (CPI): A tier-1 data point, last month’s release for June delivered a below-expectations surprise on both headline and core readings. However, readings are still well above the Fed’s goal, and the chance of a rebound is high, especially considering the upswing in Mideast tensions and energy and commodity prices in July. The fresh reading will provide an important yardstick for the market and the Fed’s assessment of inflation and direction of rates.

Producer Price Index (PPI): A measure of wholesale-level inflation, the reading for June broadly reinforced the signal from the CPI that inflation pressures could be easing. Yet levels remain elevated, and energy and commodity prices moved higher in July. Indeed, consensus expectations are for an uptick in the MoM readings.

Initial & Continuing Jobless Claims: Initial claims came in slightly under the survey estimate (199k actual vs. 205k estimate). This helped move the 4-week moving average lower to 198.75k. Conversely, Continuing Claims moved slightly higher this week: 1,801k vs. 1,789k estimate. Over the past six weeks, this dataset has been in a general, modest downward trend, and the data reflects both employer reluctance to lay off workers and workers exiting the labor force.

Retail Sales: Sales have remained sturdy, seemingly buttressed by well-off consumers and by a decline in consumer savings. The July ex-auto & gas measure is expected to tick a tad lower.

University of Michigan Consumer Sentiment - Preliminary: The headline barometer for this month’s report is expected to decline to 52.5 from 55.2, likely in part due to a rise in energy prices. Overall, sentiment remains historically depressed and well below long-run averages, suggesting consumers still face pressure from high price and rate levels.

Federal Reserve Bank Member Appearances:

• 8/07/2026 10:00 Richmond Fed President Barkin speaks at National Association of Business Economics event.
• 8/08/2026 12:45 Fed Vice-Chair Bowman speaks at Kansas Bankers Association event.
• 8/13/2026 08:40 Richmond Fed President Barkin speaks on economic outlook at Johns Hopkins Business School conference.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	$110bln; $100bln	8/6 -- 8/11
13-Week; 26-Week	$92bln; $79bln	8/10 -- 8/13
6-Week	$95bln	8/11 -- 8/13
Notes	Offering Amount	Auction Date -- Settle Date
3-Year	$58bln	8/11 -- 8/17
10-Year	$42bln	8/12 -- 8/17
Bonds	Offering Amount	Auction Date -- Settle Date
30-Year	$25bln	8/13 -- 8/17

 

Key Market Trends

Source: Bloomberg. As seen here, the trend higher in rates since end-February has placed a notable damper on mortgage refinancings. Indeed, the Mortgage Bankers Association refi index has hit its lowest level in over a year. On a side note, a decline in refinancings can lead to duration extension of MBS, loans, and mortgage servicing rights. Some holders of these asset-types engage in hedging (often referred to as “convexity hedging” in market parlance) extension and contraction risk, and this activity can lead to temporary exacerbated pressure on rates. In the case of an upward move in rates and extension risk, common hedging techniques involve selling/shorting UST’s and/or MBS TBA’s, entering pay-fixed swaps, or purchasing options.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve was relatively flat vs. the week prior. An apparent easing of Mideast tensions provided an impetus for yields to retrace from previous past-year highs. The market’s end-2026 Fed Funds forward is ~3.97%, approximately the same as it was a week ago and equates to ~1.4 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 4.115%, now pricing in a cumulative 1.9 25-bps hikes. This date represents the cycle peak of rates on the forward curve, at least for the moment.

Sources: FHLB Office of Finance; FHLBNY. FHLB-system debt outstanding posted a modest MoM decrease of $9.7bn in July. As can be seen, activity levels have moderated from earlier in the year in January, and, most notably, April when debt outstanding registered a $100bn MoM increase. The year-to-date increase in debt outstanding, meanwhile, stood at an impressive $169.3bn as of end-July. The longer-term chart portrays the dynamic flexibility of the FHLB in meeting ever-changing member needs. Also note that this data represents the full FHLB-system, as FHLB debt is issued in “joint and several” form; activity levels across FHLB districts can vary each month.

Sources: Bloomberg; Barclays Research. Shown here is the 2026 trend and rest-of-the-year projections in net “ex-Fed” (subtracts what the Fed buys in its Reserve Management Program and MBS portfolio reinvestments) T-Bill issuance. Market strategists maintain varied projections on issuance levels, but the consensus call is for further net positive supply the rest of August before reaching an expected respite in September. The increased net supply this summer has driven volatility and widening in Bill spreads and, consequently, our paper as well. With the Fed “in play”, Money Market Funds (MMF) turned cautious and decreased WAM into the last FOMC meeting, and a few more FOMC meetings await in the next three months. MMF AUM, while still at elevated levels, also edged lower in July. Essentially, these dynamics added term premium to short-end paper and widened spreads to the SOFR swaps curve. Given these conditions, the rest of the month could remain relatively bumpy, in terms of short-end markets and our advance rates.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of Thursday morning, and relative to a week ago, the short-tenor curve is rather unchanged. 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. Money Market Fund AUM, meanwhile, has helped demand for short paper, although AUM has slipped in recent weeks, and funds have also decreased WAM. These dynamics have overall 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 days of net positive settlements. These auction settlements, when net positive in either Bills or UST notes/bonds, can extract cash from the markets and thereby exert upward pressure on short-end rates and impact our shortest-tenor advance levels. Nevertheless, overnight SOFR is expected to remain at or near the Fed’s 3.65% IORB rate, although expected heavy August supply has and could pose further challenge. Indeed, SOFR ticked up to 3.66% on a few days this past week. 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 lower by approximately 6bps from 1 to 10 years 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 slate of 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.