Momentum is building behind Harper's return to Washington, the source said, while the Phillies are reportedly escalating their pursuit of Machado.
Harper is also expected to meet with the Phillies this week in Las Vegas.
The Nationals and Harper have reportedly met multiple times in recent weeks - including a five-hour sit-down before Christmas - with Washington's most recent offer being "much more" than the $300 million he reportedly rebuffed in November.
The 2015 National League MVP has become one of MLB's cornerstone players while playing the past seven years in Washington, formulating a .279/.388/.512 slash line with 184 home runs and 521 RBIs in 927 games.
Harper's also generated plenty of interest from other teams in free agency, including the Phillies, Los Angeles Dodgers, and both Chicago clubs.
Meanwhile, Machado's market appears to be revolving around four teams, according to a recent report. The 26-year-old met with the Phillies, New York Yankees, and White Sox in December. The fourth club is unknown.
Philadelphia is prepared to spend, but the White Sox are reportedly building momentum towards acquiring him, plus they've recently added his brother-in-law Yonder Alonso and close friend Jon Jay to their club.
Machado's camp is seeking $300+ million. Neither of the White Sox or Phillies are believed to be close to that ask, reports Jon Heyman of Fancred Sports.
The four-time All-Star and his wife Yainee apparently would prefer to wind up in New York over other cities, but the Yankees haven't made an official offer yet, Heyman adds.
Machado posted a career-high OPS of .905 in 2018, appearing in his first World Series with the Dodgers.