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23rd February 2026

Municipal market update

January’s Personal Consumption Expenditures (PCE) Price Index indicated that inflation pressures firmed at the start of the year, with both headline and core readings accelerating relative to the prior month. The report suggested that while disinflation progress has been made in recent months, underlying price pressures remain persistent.

Municipal bond issuance is projected to reach approximately $10 billion this week.

The firmer reading tempered some of the optimism generated by earlier CPI data and reinforced the Federal Reserve’s cautious approach toward policy easing. As a result, markets reassessed the timing and magnitude of potential rate cuts later in 2026. Notably, the recent Supreme Court ruling striking down certain tariff measures, and the President’s subsequent response, did not appear to disrupt the strong technical backdrop in the municipal market, where demand conditions remained constructive despite the broader policy headlines.

Municipals outperformed Treasuries last week. The municipal market continued to see strong inflows: Lipper reported $1.3 billion in fund inflows for the week ending February 19, representing the thirteenth consecutive week of inflows. The SIFMA Municipal Swap Index reset to 2.22%, down from the previous week of 2.52%.

This week’s most important economic releases include Initial Jobless Claims and Producer Price Index.

Municipal bond issuance is projected to reach approximately $10 billion this week. Cabrera will serve as co-manager on the largest deal of the week, a $1.93 billion Regents of the University of California sale.

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

  • $1.93 billion Regents of the University of California General Revenue Bonds, 2026 Series CE & CF (Aa2/AA/AA/-)

  • $1.10 billion The Black Belt Energy Gas District Gas Project Revenue Bonds, 2026 Series E (A2/-/-/-)

  • $681.31 million Lee County, Florida Airport Revenue Bonds, Series 2026A-1, A-2, & B (A2/-/A/AA-)

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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.

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