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12th January 2026

Municipal market update

Over the weekend, news was released that the Department of Justice served the Federal Reserve with grand jury subpoenas threatening criminal indictment. Early this morning, treasuries were higher by 4-5 basis points, but that has since subsided, and the 10-year Treasury is higher by only 1 basis point. Municipal Market Data (MMD) is currently unchanged.

Municipal bond issuance is projected to reach approximately $8 billion this week, an increase from $5.9 billion last week.

Markets opened last week watchful rather than directional, taking a “wait and see” approach as labor data offered mixed information on job creation, inflation, and productivity, and some Fed governors continued to advocate for rate cuts. The MMD yield curve steepened significantly above 5 and 10-year averages, with the 30-year now 154 basis points, or nearly double the 10-year average.

The outperformance of MMD over Treasuries has significantly shifted MMD/UST ratios, which now stand well below the 1,5 & 10-year averages. Lipper reported $1.50 billion in fund inflows for the week ending January 8, up from $679 million the prior week. The SIFMA Municipal Swap Index reset

The week’s largest transactions include the following:

  • Cabrera Capital will serve as Lead Manager on a $760.3 million Dallas Independent School District Unlimited Tax School Building Bonds, Series 2026A (Aa1/NR/NR/AAA) - PSF (Aaa/NR/NR/NR)*

  • $1.5 billion New York New York City Transitional Finance Authority, Future Tax Secured Subordinate Bonds, Fiscal 2026 Series F-1 (Aa1/AAA/AAA/NR)**

  • $1.276 billion Metropolitan Nashville Airport Authority Improvement Revenue Bonds, Series 2026A, B&C

    (NR/AA-/A+/AA)

*Cabrera will serve as Senior Manager

**Cabrera will serve as Co-Manager

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