Market Insights

The Federal Reserve held rates steady this week, but the vote itself was the story. Three regional Fed presidents — Cleveland’s Beth Hammack, Minneapolis’s Neel Kashkari, and Dallas’s Lorie Logan — dissented in favor of a quarter-point hike.

Yields moved higher again this week. The 10-year Treasury touched 4.70% as we write this, and munis and corporates followed, pushing prices lower across the curve.

Investors placed more than $70 billion in orders for roughly $2.4 billion of tax-exempt bonds this week, one of the largest order books in municipal market history.

Tuesday morning, 10-year Treasury yields fell 10 basis points to 4.57% in a single session. Thirty-year yields dropped to 5.11%.

April CPI came in at 3.8% year-over-year — the fastest pace since 2023 — and the bond market noticed. Long-dated Treasury yields are pushing toward 5%, the Fed’s internal consensus is fracturing, and the rate-cut timeline the market was pricing just weeks ago has been quietly shelved.

According to data from Bloomberg, investors poured $22.3 billion into municipal bond funds in the first four months of 2026 — the fastest pace of inflows since 2021.

This week brought a confluence of developments that, taken together, strengthen the case for tax-exempt municipal bonds.

The bond market is being pulled in two directions — a Fed that is structurally more hawkish than its single-cut dot implies, and an oil-driven rate shock with no defined endpoint.

We have been reporting on NYC regarding the change in leadership – yesterday, 3/11, Moody’s lowered its outlook on NYC to negative, citing “sizable and persistent” budget gaps.