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6th April 2026

Municipal market update

The municipal market found firmer footing last week as geopolitical tensions surrounding the U.S.-Iran conflict showed intermittent signs of easing through Thursday. Early-week optimism was shaped by constructive headlines and comments from Fed Chair Powell, who noted that policy is “in a very good place to observe the effects of the Iran conflict on the Fed's dual mandate,” signaling that the central bank is closely monitoring economic conditions but is not expected to change its stance in the near term.

Meanwhile, the SIFMA Municipal Swap Index reset lower to 2.37% from 2.42%.

The March jobs report released on Friday showed stronger-than-expected payroll growth and a lower unemployment rate, underscoring a resilient labor market. Overall, municipals outperformed Treasuries across much of the curve for the week, with the MMD AAA scale seeing steady gains led by the belly and long end.

March was a challenging month for Treasuries and municipal bonds alike, marked by heavy supply, rising oil prices, and broader inflation pressures pushing all rates higher. However, municipal yields rose more than Treasuries, leaving MMD/UST ratios at attractive levels heading into the new month. This was reflected in fund flows, as investors allocated $923 million to municipal bond funds last week. Meanwhile, the SIFMA Municipal Swap Index reset lower to 2.37% from 2.42%. Looking ahead, investors will continue to weigh geopolitical developments alongside key economic data, including PCE, CPI, and GDP growth. This data will provide a key read on inflation and economic growth amid ongoing Middle East uncertainties.

This week Cabrera will serve as senior manager for the State of Rhode Island’s $221 million General Obligation bonds ($149 million Tax-Exempt, $72 million Taxable) and as co-manager for Bexar County Hospital District’ $119 million Limited Tax refunding bonds. The three largest transactions of this week include:

  • $894 billion Nashville & Davidson County Health & Ed. Facilities Board Revenue Bonds (-/A/A/-)

  • $742 million California Municipal Finance Authority Revenue Bonds (A2/-/ -/-)

  • $507 million City of Rochester Health Care Facilities Revenue Bonds (Aa2/AA/-/-)

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30th March 2026

Municipal market update

The municipal market continued to be weighed down by geopolitical tensions surrounding the U.S.–Iran conflict, rising oil prices, and a soft Treasury auction – all of which drove volatility across fixed income markets.

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