27th October 2025

Municipal market update

Last week, municipal bond market performance was mixed with the belly and long end of the curve seeing robust demand amid a heavier issuance calendar (+$15 billion), while the front end remained under pressure. Treasuries traded in a narrow range, hovering around 4% in the 10-year maturity as investors navigated the ongoing government shutdown and limited economic data. The September U.S. Consumer Price Index (CPI) was released Friday, showing a 3.0% YoY increase and a 0.3% MoM gain, slightly above expectations.

Municipal mutual funds saw their 4th consecutive week of reported inflows at $1.1 billion. The SIFMA Municipal Swap Index reset to 2.50%, up 19 basis points from the previous week's 2.31%.

The report, delayed due to the shutdown, prompted a brief rally in Treasuries as investors assessed inflation pressures ahead of the Federal Reserve's policy meeting this week, October 29th. Investors are expecting a 25-basis point reduction in the fed funds rate and will be closely monitoring the Fed's commentary for signals on their policy stance and future rate decisions. In trade developments, President Trump's administration continues to express optimism regarding negotiations with Chinese officials, aiming to de-escalate tariff tensions. This shift in tone has contributed to improved investor sentiment across markets.

Approximately $7.0 billion of municipal bonds are expected to price this week, noticeably lower than recent weeks as investors and issuers await the Federal Reserve's rate decision this Wednesday. Cabrera will be serving as Joint Bookrunner and Co-Dealer Manager on the $1.093 billion Board of Education of the City of Chicago transaction.

The week’s largest transactions include the following:

$1.093 billion Board of Education of the City of Chicago, Unlimited Tax General Obligation Refunding Bonds, Series 2025B & 2025C (NR/BB+/NR/BBB-)

$450.000 million Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 2025 Series E (Non-AMT), Series F (Taxable), and Series G (Non-AMT) (Aaa/AAA/NR/NR)

$289.975 million Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, 2025 Series E (Aaa/AAA/Aaa/NR)

Download the full update