8th June 2026

Municipal market update

Municipal bonds continued to demonstrate resilience despite a heavy issuance calendar, outperforming U.S. Treasuries. Ongoing geopolitical tensions in the Middle East continue to pressure the market causing a treasury sell-off early in the week after a lack of resolution during the weekend of May 30th. The Federal Reserve Board is increasingly focused on persistent inflation. The next FOMC meeting is next week with the current market sentiment indicating no probability of a quarter-point rate cut during the meeting.

The SIFMA Municipal SWAP Index reset to 2.14%, 57 basis points above the prior week.

Unemployment data came in as expected at 4.30% with no change from the previous reporting, triggering another treasury sell-off towards the end of the week. A stronger-than-expected gain in May nonfarm payrolls supports the view that the U.S. economy remains resilient amid ongoing challenges. Nonfarm payrolls increased by 172,000, well above the expected increase of 88,000. Despite this continued labor market strength, elevated price pressures are likely to persist and remain a key concern for the broader economic outlook. Market resilience continues and investor demand for municipals remains strong, with Lipper reporting a seventh consecutive week of inflows, five of which exceeded $1 billion. Supply continues to remain elevated, a trend which is expected to continue throughout the summer.

The SIFMA Municipal SWAP Index reset to 2.14%, 57 basis points above the prior week.

This week Cabrera is serving as Senior Manager on a transaction for $463.610 million State of Illinois Build Illinois Bonds (Sales Tax Revenue Bonds), Junior Obligation, Series of June 2026 (NR/A/A+/AA+). The firm’s Co-Managed engagements this week include Pennsylvania Turnpike Subordinate Revenue Refunding Bonds & Motor License Fund Enhanced Special Revenue Refunding Bonds, Series 2026 and $311.235 million City of El Paso General Obligation Refunding and Improvement Bonds, Series 2026 (NR/AA/NR/AA+). The three largest transactions of this week include the following:

$983.790 million The Commonwealth of Massachusetts General Obligation Bonds, Consolidated Loan of 2026, Series D & B (Aa1/AA+/AA+/NR)
$725 million Main Street Energy, Inc. Energy Project Revenue Bonds, Series 2026A (Aa2/NR/NR/NR)
$700 million County of Los Angeles 2026-27 Tax and Revenue Anticipation Notes Series A

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