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17th February 2026

Municipal market update

Inflation data were the primary focus last week, as January’s Consumer Price Index came in softer than expected, reinforcing signs that price pressures continue to moderate. Both headline and core readings showed continued cooling on a month-over-month basis, supporting the view that restrictive monetary policy is having its intended effect.

Municipal bond issuance is projected to reach approximately $7 billion this week.

The delayed January Employment Report, released midweek following last week’s government shutdown, showed better-than-expected nonfarm payrolls and a decline in the unemployment rate to 4.3%. Taken together, the inflation and jobs data reduced near-term inflation concerns, signals that rate cuts may happen in June or sooner.

Primary municipal issuance remained light last week. Both municipal and Treasury yield curves moved lower over the course of the week, with treasuries outperforming in response to inflation data. The municipal market continued to see strong inflows: Lipper reported $1.6 billion in fund inflows for the week ending February 12, representing the twelfth consecutive week of inflows. The SIFMA Municipal Swap Index reset to 2.52%, up from the previous week of 2.17%.

The President’s Day-shortened week presents a light calendar for economic releases, and attention will center on the PCE Price Index for further insight into the state of inflation and the FOMC’s trajectory.

Municipal bond issuance is projected to reach approximately $7 billion this week. Cabrera is an underwriter for two of the week’s largest transactions, serving as Co-Senior Manager for Chicago O’Hare International Airport and Co-Manager for the Bay Area Toll Authority (CA).

Some of the week’s largest transactions include the following:

  • $475.83 million Chicago O’Hare International Airport General Airport Senior Lien Revenue Bonds, Series 2026A (-/A+/A+/A+)

  • $452.90 million Bay Area Toll Authority San Francisco Bay Area Toll Bridge Revenue Bonds, 2026 Series A & F-1 (-/AA/AA/-)

  • $447.17 million South Carolian Public Service Authority Revenue Obligations, Series A, B & C (Aa3/A-/A-/-)

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