Municipal Bond Market Monitor – Q1 2026

Municipal bond markets have remained shaped by shifting interest-rate expectations, steady demand for tax-advantaged income, and uneven supply across sectors.

Higher yields have created more attractive entry points for investors, while credit quality has generally held up well despite pressure in some local government and healthcare issuers.

At the same time, valuations can change quickly as inflation data, Federal Reserve policy, and new issuance influence pricing and liquidity.

For advisors and investors, munis continue to offer a useful source of diversified income, but careful attention to duration risk, credit selection, and market volatility remains important.