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18th May 2026

Municipal market update

Last week’s economic data points to an increasingly inflationary environment in the U.S. economy. According to the Bureau of Labor Statistics, employment in occupations considered highly exposed to artificial intelligence declined for a second straight year in 2025, highlighting continued disruption in white-collar and customer-service roles, and broader concerns over job security increased among Americans.

The SIFMA Municipal SWAP Index reset to 2.33%, 5 basis points below the prior week.

Both consumer and producer prices accelerated sharply in April largely due to rising energy and transportation costs tied to geopolitical tensions. Federal Reserve Bank of Chicago President Austan Goolsbee warned that persistent price pressures may indicate an overheating economy, reinforcing expectations for a more cautious Fed outlook. At the same time, industrial production posted its strongest monthly gain in over a year, suggesting improving momentum in the manufacturing sector. In fixed income markets, investors secured 5% yields on 30-year Treasuries for the first time since 2007 amid rising inflation expectations and softer demand at recent auctions. Meanwhile, municipal market participants are growing more cautious as state and local governments face weakening revenues, reduced rainy-day reserves, slowing tax collections, and rising costs following the expiration of pandemic-era stimulus support.

Municipal bond funds recorded $1.3 billion of inflows in the latest weekly data. The SIFMA Municipal SWAP Index reset to 2.33%, 5 basis points below the prior week.

The three largest transactions of this week include:

  • $915.00 million PEFA Inc., Gas Project Revenue Refunding Bonds, Series 2026A (Aa3/NR/NR/NR)

  • $797.49 million Philadelphia School District, General Obligation Bonds, Series 2026 (Aa3/NR/AA-/NR)

  • $781.62 million Great Lakes Water Authority, Water Supply System Revenue and Revenue Refunding Bonds, Series 2026 (Aa3/AA-/A+/NR)

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11th May 2026

Municipal market update

Economic data last week reflected continued resilience in the U.S. economy, as April payrolls exceeded expectations with 115,000 jobs added, unemployment remained steady, productivity continued to improve, and unemployment claims stayed historically low, signaling that layoffs remain muted despite broader economic uncertainty.

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