Contact us

2nd November 2026

Municipal market update

Municipal yields declined last week alongside lower Treasury yields, with the AAA MMD scale moving 4 to 13bps lower across the curve and the largest change in the 10-year area.

On the week, MMD yields fell 7bps in 2-years, 8bps in 5-years, 13bps in 10-years, 8bps in 20-years, and 4bps in 30-years.

The Federal Reserve held its target range at 3.75%–4.00% on Wednesday, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a 25bp hike. Fed funds futures ended the week pricing a 72.8% probability of a 25bp hike at the December 9 meeting and approximately 43bps of cumulative tightening through June 2027. Treasury yields declined in the second half of the week as equity markets moved lower, led by technology stocks, while third-quarter GDP came in above estimates at 3.4% and core PCE inflation was above expectations. Brent crude closed the week near $118. Municipal funds reported $1.7 billion of inflows as the market absorbed roughly $10 billion of supply. On the week, MMD yields fell 7bps in 2-years, 8bps in 5-years, 13bps in 10-years, 8bps in 20-years, and 4bps in 30-years. Treasury yields fell 9bps in 2-years, 9bps in 5-years, 7bps in 10-years, 3bps in 20-years, and 2bps in 30-years, leaving the 2-year, 10-year, and 30-year municipal-to-Treasury ratios near 58%, 69%, and 91%, respectively.

This week, primary-market supply is expected to total approximately $6.9 billion, with $5.4 billion negotiated and $1.5 billion competitive. Cabrera will serve as Co-Senior Manager on the Chicago Public Schools’ $346 million issue. The three largest negotiated transactions this week include:

• $761.9 million City of Houston Airport System Special Facilities Revenue Bonds (United Airlines, Inc. Terminal Improvement Projects), Series 2026B (AMT)

• $404.8 million St. Louis Lambert International Airport Revenue Bonds, Series 2026B (AMT) & Series 2026C

• $346.0 million Chicago Public Schools Unlimited Tax General Obligation Bonds (Dedicated Revenues), Series 2026A

Related Articles

Market Insights

26th October 2026

Municipal market update

Treasuries rallied last week, with the long end outperforming ahead of the Fed meeting this week.

Read more