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2nd February 2026

Municipal market update

Last Wednesday’s FOMC meeting saw the Committee hold the target range steady at 3.50%–3.75%, as expected. The tone of the meeting was largely balanced, with policymakers acknowledging continued progress on inflation while reiterating that inflation remains somewhat elevated and that future policy decisions will remain data dependent.

Municipal bond issuance is projected to reach approximately $8.7 billion this week.

President Trump announced his intent to nominate Kevin Warsh to succeed Jerome Powell as Chair of the Federal Reserve when Powell’s term expires in May 2026. Warsh, a Fed Governor from 2006 to 2011, has historically been considered an interest rate ‘hawk’, but in recent months voiced support for lower interest rates. Also making headlines over the weekend, a partial federal government shutdown commenced following a lapse in funding authority, affecting a limited set of non-essential federal operations.

In light of the FOMC meeting, primary issuance in the municipal market was muted last week. Treasuries steepened over the course of the week. Lipper reported $2.06 billion in fund inflows for the week ending January 29, up from $994 million the prior week as demand continued to be supportive of the market. The SIFMA Municipal Swap Index reset to 2.28%, up from the previous week of 1.31%.

Looking ahead, this week’s economic releases include the JOLTS report, Initial Jobless Claims, and the January employment report. Market participants will continue to monitor developments in Washington related to federal funding negotiations.

Municipal bond issuance is projected to reach approximately $8.7 billion this week. Cabrera will serve as Co-Manager on El Paso County Community College District's Combined Fee Revenue Refunding Bonds, Series 2026.

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

  • $635.2 million Build NYC Resource Corporation Revenue Bonds (RiverSpring Health Senior Living Project), Series 2026 (NR)

  • $575.0 million Chicago Transit Authority Second Lien Sales Tax Revenue Project and Refunding Bonds, Series 2026A&B (-/A+/-/AA-)

  • $343.2 million San Diego County Regional Transportation Commission Sales Tax Revenue Bonds, Series 2026A (/-AAA/AAA/-)

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26th January 2026

Municipal market update

While the FOMC will meet this week, the market implied probability of any interest rate cut is negligible, however supply is subdued with a negotiated calendar of less than $4 billion.

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