Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending August 21, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
8/25/26 9:00	FHFA House Price Index MoM	Jun	--	0.30%
8/25/26 9:00	S&P Cotality CS 20-City MoM SA	Jun	0.20%	0.15%
8/25/26 10:00	New Home Sales	Jul	620k	628k
8/25/26 10:00	Conf. Board Consumer Confidence	Aug	90.20	90.80
8/26/26 7:00	MBA Mortgage Applications	21-Aug	--	-0.40%
8/26/26 8:30	Personal Income	Jul	0.20%	0.20%
8/26/26 8:30	GDP Annualized QoQ	2Q S	1.50%	1.50%
8/27/26 8:30	Initial Jobless Claims	22-Aug	--	206k
8/28/26 10:00	Prelim. Benchmark Payrolls Revision	2026	--	-911k
8/28/26 10:00	U. of Mich. Sentiment	Aug F	--	51.00

Economic reports this past week were mixed, with mostly dour housing reports offsetting a few better-than-expected datasets. In our region, the Empire Manufacturing report was an upside surprise, but the monthly NY Fed Business Leaders’ Survey was lackluster. The Mideast situation remains ongoing, thereby leaving its potential impact on commodity prices and inflation intact. However, at this stage, the market reaction function to the conflict has diminished, and effects from an enduring stalemate appear largely “baked in.” The week ahead serves a busy slate of data, with the Personal Consumption Expenditures (PCE) inflation barometer a potential highlight.

FHFA House Price Index: Last month’s report for May indicated that national home prices continue to rise, but appreciation remains relatively modest at a YoY rate of 2.2%. The MoM .3% rise reversed a decline in April. The June data will reveal if price appreciation has remained on a more moderate and sustainable pace.

S&P Cotality Case Schiller Home Prices: Last month’s report for May portrayed modest price appreciation, with a national gain of 1.1% YoY, and regional differences in results. The update for June is expected to reveal similar results. An update on the 20-City barometer will also be provided. Notably, this level of price appreciation is below the current rate of inflation.

New Home Sales: Partly a “give-back” on June’s gain, sales for July are forecast to dip by ~1.3% MoM. Sales remain below that of a year ago, and inventory remains elevated.

Conference Board Consumer Confidence: The report for August is expected to post another slight dip in the headline index. Consumers are likely to remain concerned about price levels.

Mortgage Applications: Following a recently rare rise last week, the headline weekly index for the week ending August 14th fell .4%. Purchases caused the decline, while refis posted a small rise.

Personal Income & Spending: The consensus forecast is for a MoM tick lower in July’s consumer spending and a steady print on income. The important PCE inflation barometer is expected to tick slightly higher MoM by .2 and .1%, respectively, on headline and core.

Gross Domestic Product: The second estimate for Q2 GDP is expected to repeat at 1.5% annualized QoQ, a moderation from Q1’s 2% pace.

Initial & Continuing Jobless Claims: Initial claims for the week ending August 15th rose by 4K to 206K, with the 4-week moving average rising ~4K to 204K. Continuing Claims rebounded higher to 1799K from 1777K. This dataset’s recent steady trend has suggested both employer reluctance to lay off workers and workers exiting the labor force.

Preliminary Benchmark Payrolls Revision: The BLS will release this estimate of payrolls representing the March 2025–March 2026 timeframe, which will help determine if the monthly payroll figures announced over the period overstated or understated true job growth. Although backward-looking, a large revision could precipitate rate moves.

University of Michigan Consumer Sentiment (Final): The report is likely to confirm that sentiment remains cautious and concerned about inflationary forces.

Federal Reserve Bank Member Appearances: None scheduled at this time.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week
13-Week; 26-Week	$92bln; $79bln	8/24 -- 8/27
6-Week	$95bln	8/25 -- 8/27
Notes	Offering Amount	Auction Date -- Settle Date
2-Year; 5-Year	$69bln; $70bln	8/25; 8/26 -- 8/31
7-Year	$44bln	8/27 --8/31
Bonds	Offering Amount	Auction Date -- Settle Date
1-Year 11-Month FRN	$28bln	8/26 --8/28

 

Key Market Trends

Sources: Redfin data; MLS data. The past week saw a handful of housing-related reports, which could generally be categorized as mediocre-to-weak. Single-family housing starts and pending home sales were notably weak and below expectations. Indeed, the July pending sales data matched the second-worst level of contract signings for previously owned homes since 2001. As widely recognized, affordability and rate levels have played a significant role in the ongoing middling-to-weak housing data. Here we can see that a key reason for the decline in activity is that the sheer number of people looking to buy a home has notably fallen in the last few years, especially relative to the number of home sellers. The Redfin data estimates that there were 51.3% more sellers than buyers in July. Home price appreciation has decelerated in recent readings but clearly not yet enough to inspire greater numbers of homebuyers. It should be noted that this data is national and that regional differences exist. For instance, this dataset shows a meager six “seller’s markets” in the U.S., and the NYC suburbs are leading in this category and displaying generally strong demand.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve rebounded modestly higher from the week prior. The 2-, 5-, and 10-year rose by ~5, 6, and 4 bps, respectively. The rise in longer tenors was more contained due to a program update from the US Treasury (see the next chart’s comments for basic details). Market-moving news was otherwise minimal. The market’s end-2026 Fed Funds forward is ~3.86%, essentially the same as a week ago and which equates to ~93% chance of a 25-bps rate hike in 2026. September prices ~38% chance of a hike, again about the same as last week. A greater chance and accumulation of hikes is priced into H2 next year, with the September 2027 FOMC forward, at 4.01%, a few bps higher than a week ago and pricing in a cumulative 1.5 25-bps hikes. This date represents the cycle peak of rates on the forward curve, as of this writing.

Sources: Barclays Research; Federal Reserve. A contributing factor to recent upward pressure on longer-tenor UST yields is that, as seen here, the investor base has evolved over the last decade to be more price-sensitive. Demand from foreign and domestic official sources (central banks and the Fed) tends to be more programmatic and less sensitive to valuations. While these buyers’ share of UST ownership has declined in recent years, that of private buyers, who are decidedly valuation-conscious and sensitive, has increased. Note also that the federal debt was announced this week at a record high of $40trn, and higher deficits tend to indicate looming increases in net UST issuance supply. These dynamics can contribute to upward drift in term premium and relative yields. The relevance of this trend appears to have not escaped the current Treasury Department, as the Secretary surprised the market this week with an announcement to increase its UST buyback program in 10-year-plus bonds. This program’s stated intent is to enhance liquidity in off-the-run securities, but this week’s change also seemed designed to prod yields lower.

Sources: SIFMA; FHLBNY. Another likely contributing factor to upward pressure on term UST yields has been corporate bond issuance. As seen here, issuance over the past year has been robust. Gross issuance, at $1.681bn, was up 26.9% YoY through July. Indicating an increase in net issuance, outstanding debt had increased 3% YoY through Q1 and has likely maintained that pace since. With much AI-driven issuance, this year has witnessed some very large multi-tranche deals. The heavy slate of issuance adds duration to the bond markets, which must be absorbed; this dynamic, in tandem with basic supply-and-demand forces, can contribute to upward pressure on longer yield curve tenors.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of Thursday late-morning and relative to a week ago, the 2-month-and-in zone was 2 to 6 bps higher, with longer tenors generally unchanged. Our shortest-tenor funding spreads, after tightening a bit late last week, ticked higher again and prompted the move. In terms of overall liquidity conditions and SOFR behavior, Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases (RMP) 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 rebounded smartly this month and added funds to the money market space. Indeed, financing conditions have been tranquil enough that the Fed has paused its RMP until mid-September.
• Net T-bill supply is expected to moderate and turn negative in September, nearer the corporate tax date on the 15th. But the rest of the month contains some net-positive Bills and UST supply to digest on the 25th/27th/28th/31st. These auction settlements, when net positive, can extract cash from the markets and potentially exert upward pressure on repo and thereby impact our shortest-tenor advance levels. SOFR, however, appears likely to trade near the Fed’s 3.65% IORB rate, as it has navigated August’s supply well thus far.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was 2 to 6 bps higher from the week prior. The 3-year-and-out sector was almost uniformly higher by 6 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.