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1st June 2026

Municipal market update

Municipals were firmer ahead of June reinvestment monies, supported by improving sentiment tied to potential geopolitical developments related to the Iran conflict following two weeks of volatility. Inflation concerns have recently pressured rates, as higher-than-expected PPI and elevated inflation data triggered a selloff, pushing the 30-year Treasury yield as high as 5.18% in the past two weeks. Oil prices also spiked above $105 per barrel amid ongoing Iran-related tensions, contributing to inflationary pressures.

The SIFMA Municipal SWAP Index reset to 1.57%, seven basis points below the prior week.

Economic data showed the Fed’s preferred PCE index rose 3.8% year-over-year in April, in line with expectations but still well above target, reinforcing a cautious outlook for policy. Despite this backdrop, technicals remained supportive, with Lipper reporting $2.3 billion of inflows, marking the fourth consecutive week exceeding $1 billion. Supply was elevated due to a compressed issuance calendar following the prior holiday, with a particularly heavy slate midweek.

The SIFMA Municipal SWAP Index reset to 1.57%, seven basis points below the prior week

This week, Cabrera is serving as Senior Manager on transactions for Dallas County ($386 million) and El Paso County ($43 million), as well as Co-Senior for Harris County Hospital District ($823 million). The firm’s Co-Managed engagements this week include Bay Area Toll Authority, Del Mar College, and State of Oregon. The three largest transactions of this week include:

  • $989.5 million The Regents of The University of California, General Revenue Bonds, 2026 Series CG, 2026 Series CH (Aa2/AA/AA/NR)

  • $926.7 million Commonwealth of Kentucky, State Property and Buildings Commission Bonds (NR/NR/AA-/NR)

  • $823.2 million Harris County Hospital District Limited Tax and Refunding Bonds, Series 2026 (Aa1/NR/NR/AA+)

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