Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending August 28, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
9/1/26 10:00	ISM Manufacturing	Aug	55.40	55.60
9/1/26 10:00	Construction Spending MoM	Jul	-0.10%	-0.10%
9/1/26 10:00	JOLTS Job Openings	Jul	7,300k	7,359k
9/2/26 7:00	MBA Mortgage Applications	28-Aug	--	-1.00%
9/2/26 8:15	ADP Employment Change	Aug	39k	44k
9/2/26 10:00	Factory Orders	Jul	0.10%	-0.30%
9/3/26 8:30	Initial Jobless Claims	29-Aug	--	203k
9/3/26 10:00	ISM Services Index	Aug	54.30	54.10
9/4/26 8:30	Change in Nonfarm Payrolls	Aug	60k	-23k
9/4/26 8:30	Unemployment Rate	Aug	4.20%	4.10%

**Please note that the Weekly Market Update will return on Friday, September 11th; Happy Labor Day weekend!**

Data this past week was mixed and void of game-changing impact. Housing-related data remains mixed, with new home sales lower but the house price moderation trend generally remaining intact. Inflation data remains elevated, thereby keeping a Fed hike “in play” for the rest of 2026. The Mideast situation lingers and continues to potentially underpin commodity prices and inflation. The week ahead serves another steady stream of data before the holiday weekend. The series of labor market reports, including the monthly BLS jobs release, will attract close attention from the markets. However, the more immediate potential highlight could be Fed Chair Warsh’s Jackson Hole Symposium address, slated for ~10 a.m. on the 28th, near the time this publication hits inboxes.

ISM Manufacturing: Last month’s report for July revealed a surprising strengthening in conditions. Indeed, the index posted its highest level since May 2022. However, the report reflected ongoing price pressures. The August report is expected to tick slightly lower on the headline index.

Job Openings & Labor Turnover (JOLTS): Last month’s report from the BLS for June generally portrayed a less dynamic yet not sharply deteriorating market. July’s data is likely to reflect similar conditions, and expectations are for a modest drop in the job openings measure.

Construction Spending: Last month’s results for June posted a MoM dip of .1%, and the July figure is expected to repeat this decline. The dip has been led by housing weakness, as the nonresidential and public sectors have registered flat-to-modest gains.

Mortgage Applications: The headline weekly index for the week ending August 21st fell .1%, after dropping .4% the week prior.

ADP Employment Change: This monthly private payrolls barometer is expected to dip by 5K to 39K, again signaling a cooling in private-sector hiring momentum.

Factory Orders: Following two consecutive MoM declines, orders are expected to register a slight rebound for July.

Initial & Continuing Jobless Claims: Initial claims for the week ending August 22nd fell 4K to 203K, and the 4-week moving average ticked a tad higher to 205.5K. Continuing Claims displayed further moderation, dipping by 8K. This dataset’s recent trend suggests an employer reluctance to lay off workers and workers exiting the labor force.

ISM Services: The August report is expected to show slight improvement from the sturdy results of last month. Price pressures are expected to tick a bit lower but remain in elevated territory.

Employment Situation: The monthly jobs report will cap off the week prior to the holiday weekend. The headline nonfarm payrolls figure is expected to rebound from last month’s -23K and post a 55K rise. This whole dataset from the BLS is notoriously difficult to forecast and is often subject to subsequent revision. The unemployment rate is expected to tick slightly higher to 4.2%.

Federal Reserve Bank Member Appearances: 

• 08/27/2026 - 08/29/2026 Jackson Hole Economic Policy Symposium: Hosted by the Kansas City Fed, the official theme is "Financial Innovation: Implications for Payments and Policy.”
• 08/28/2026 10:00 Fed Chair Warsh will deliver the Jackson Hole keynote address.
• 09/04/2026 14:00 Fed releases the “Beige Book,” its qualitative report published eight times per year that summarizes current economic conditions across all twelve Fed Districts.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week
13-Week; 26-Week	$92bln; $79bln	8/31 -- 9/3
6-Week	$85bln	9/1 -- 9/3
52-Week	$52bln	9/1 -- 9/3
Notes	Offering Amount	Auction Date -- Settle Date
No scheduled Note offerings.
Bonds	Offering Amount	Auction Date -- Settle Date
No scheduled Bond offerings.

 

Key Market Trends

Sources: Bloomberg; S&P Cotality Case-Shiller. This past week, the S&P Cotality CS Home Price report for June was released. The data is representative of existing home sale prices and registered a 1.5% YoY increase in its overall national index. The data again revealed a growing split between sturdier Midwest/Northeast markets and weaker Western ones. As can be seen here, the national price rises have been decelerating over the past two years. Notably, also seen here, in the past year, this metric has not only decelerated but also trended below inflation (~3.5% YoY for CPI). Essentially, reflecting the impact of higher rates and affordability constraints, the extraordinary home price gains of 2021-2022 have given way to a period of modest nominal gains, and, more recently, and a kernel of positive news for prospective homebuyers, negative real price changes.

Sources: Bloomberg; National Association of Realtors. Another kernel of relatively positive news for prospective homebuyers is that prices for new homes have fallen below those for existing homes. As seen here, median new home prices are ~$40K below that of existing. A variety of dynamics have contributed to this condition. The mortgage rate lock-in effect continues to support existing home prices, as it limits resale inventory. Meanwhile, new homebuilders have increasingly used incentives, mortgage-rate buydowns, and smaller floor plans to maintain sales and clear built-up inventory. As a result, new home sales as a share of total sales have risen in the past year. Nonetheless, affordability challenges remain a headwind to all sales. Indeed, the past week’s new home sales for July posted a decline from the month prior and were below expectations; in essence, both sales and homebuilder confidence remain in the doldrums.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve was mildly flatter and mixed. The 2-year rose ~2 bps, the 5-year was unchanged, and the 10-year dipped by ~3 bps. Rates mostly range-traded over the week and awaited Fed Chair Warsh’s end-of-week address. The market’s end-2026 Fed Funds forward is ~3.905%, 4 bps higher than a week ago, which equates to ~110% chance of a 25-bps rate hike in 2026. September prices ~38% chance of a hike, or the same as the past two weeks. A greater chance and accumulation of hikes is priced into H2 2027, with the June 2027 FOMC forward, at 4.08%, about 5 to 6 bps higher than a week ago and pricing in a cumulative 1.8 25-bps hikes. This date represents the cycle peak of rates on the forward curve, as of this writing.

Source: JP Morgan. As seen here, after two months of net-positive T-bill issuance, the month of September should offer a reprieve and a period of net-negative issuance. Partly, the change in issuance pattern owes to the Treasury’s receipt of funds leading into the September 15th corporate tax date. The elevated net issuance this summer spurred occasional bouts of volatility and wider spreads (to SOFR swaps) in Bills and our short paper. Money Market Funds (MMFs) have also notably reduced WAM to ~37 days in the past few months, given uncertainty on monetary policy and the Fed being “in play.” The reprieve in issuance may provide steadier conditions and possibly somewhat tighter spreads on short paper. MMF AUM, moreover, has increased for four straight weeks and potentially may spur keener demand for short-end paper.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of Thursday late-morning and relative to a week ago, short tenors were little changed. Most tenors were either unchanged or a bp higher or lower. A slight increase in Fed hike pricing was offset by a slight decrease in our funding spreads. 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 greased stability in financing markets and helped 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 at least mid-September.
• Net T-bill supply is poised to turn negative in September, and this change may help quell, in the month ahead, some of the volatility witnessed this summer in T-bill and our spreads (in relation to the swaps curve). The 31st, in addition to being month-end, has a large UST auction settlement. These auction settlements, when net positive, can extract cash from the markets and potentially exert upward pressure on repo and thereby impact our very-short-tenor advance levels. Further out, the September 15th corporate tax date will temporarily remove funds from the system. SOFR, however, appears likely to trade near the Fed’s 3.65% IORB rate, as it has calmly navigated August’s supply.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was flatter and mixed from the week prior. The 2- and 5-year rose by 4 and 1 bp, respectively, while the 10-year fell 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 as a break from 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.