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4th May 2026

Municipal market update

The municipal bond market delivered its best performance for April in over a decade. According to the most recent public estimate, the US has spent approximately $25 billion on the current military conflict in Iran.

The SIFMA Municipal SWAP Index reset to 3.09%, 53 basis points below the prior week.

The market is anticipating resulting inflation for consumers and the US economy is expected to become more reliant on government and business spending for growth in 2026. Gas prices continue to rise nationwide with no certainty as to when the conflict in the middle east will be resolved. President Trump stated he would raise tariffs on European Union cars and trucks to 25% due to the EU not complying with the current US-EU trade deal. Last week the municipal market saw a constructive technical backdrop despite macro pressure from rates. New issuance was well digested given the influx of cash even though rate volatility and inflation concerns remain a top focus.

Four Federal Reserve officials dissented from last week’s policy statement due to differing views on whether interest-rate cuts are, or should be, on the horizon. The next six weeks before the next FOMC meeting will be critical to their rates decision. Visible supply finished last week at $16.7 billion, above the year’s average of $14.2 billion and begins this week at $15.9 billion. Municipal bond funds recorded $0.615 billion of inflows in the latest weekly data. The SIFMA Municipal SWAP Index reset to 3.09%, 53 basis points below the prior week.

The three largest transactions of this week include:

  • $814.14 million City of Chicago, Water Revenue Bonds, Series 2026A/B/C (NR/A+/A+/AA)

  • $812.06 million Southern California Public Power Authority, Clean Energy Project Revenue Bonds, Series 2026A (Aa3/NR/NR/NR)

  • $573.675 million Board of Regents, Texas State University System, Revenue Finance System Revenue and Refunding Bonds, Series 2026A (Aa2/NR/AA/NR)

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27th April 2026

Municipal market update

The front end of the municipal curve remained under pressure last week, with short-term yields rising by as much as 6 basis points as investors continued to move out the curve in search of more attractive relative value.

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