Municipal Bonds Outperform as Demand and Yields Remain Attractive

The latest weekly market assessment highlights resilient municipal bond fundamentals, strong investor demand and attractive yields despite continued interest-rate volatility.

• Municipal bonds have outperformed taxable bonds in 2026, with investment-grade and high-yield munis returning 0.61% and 2.41%, versus -0.34% for the U.S. Aggregate Index. 
• Demand remains strong, with $38.3 billion flowing into longer-maturity munis and $9.1 billion into high-yield municipal bonds in 2026. 
• High-yield munis offer taxable-equivalent yields of 7.8% at the shorter end and around 9.0% at longer maturities, while maintaining relatively low equity correlation. 

Explore the full commentary for the latest view on municipal credit, yields and curve positioning.