Jessica Lerner

Tender activity has risen between 2019 and 2024, with muni issuers executing more than $48 billion, according to the Government Finance Officers Association.

Tariff threats, international conflicts and inflation concerns are working "in tandem on the municipal side to slow down some of the aggressive interest that was there in the beginning of summer," Sage Advisory's Jeff Timlin said.

Issuance is an estimated $10.567 billion this week, with $8.948 billion of negotiated deals on tap and $1.62 billion of competitives, according to LSEG.

The deal funds the municipalization of a private water utility that had been controlled by investor-owned utility Eversource.

The focus on Wednesday has been on the primary market, particularly the six-part $2.4 billion deal from the New York State Thruway Authority, which came a little wider than where the issuer had been trading in the secondary market.

The Aquarion deal is joined this week by two other sizable deals: the New York State Thruway Authority's $2.444 billion state personal income tax revenue bonds, and the New Jersey Turnpike Authority's $1.06 billion turnpike revenue bonds in two deals.

Many local governments face budget issues, including two of the largest cities by population, New York City and Chicago, both of which saw negative rating action during the first half of the year, per Breckinridge strategists.

Robust demand is one of several drivers supporting the muni market even in the wake of ongoing uncertainty around economic growth, inflation and interest rates, said Daryl Clements, a portfolio manager at AllianceBernstein.

A big story this year has been demand, which is supporting the market, said Tom Kozlik, head of public policy and municipal strategy at HilltopSecurities.

Right now, rates can't get any traction due to "Iran re-escalating, hawkish Fed minutes, Treasury auctions [and] AI bond supply crowding credit," among other factors, said James Pruskowski, managing director at Hennion & Walsh.

Resuming the war with Iran has renewed volatility for munis and Treasuries.

Financial markets have embraced prediction markets as a mainstream crowdsourced provider of real-time probability signals and risk-hedging tools.

Declining tender activity stems largely from higher interest rates, and a higher-for-longer interest rate environment is expected to "keep a lid" on any tender resurrection, said Jeff Lipton, market intelligence analyst at Bond Buyer.

Deals that offer some value and spread opportunities will be well-received, while those that are less attractive or higher quality might face some challenges in certain parts of the curve, said Jeff Timlin, managing partner and head of municipal bond investing at Sage Advisory.

Next payments are due July 14 and 15.

Municipal issuers sold $299.293 billion of bonds in the first half of 2026, up 5.2% year-over-year, according to LSEG data.

Issuance falls to an estimated $5.055 billion this week, lighter due to the holiday, and it's possible some deals will come on Monday.

Thursday was quiet in the muni market as many deals — which did pretty well upon pricing or selling — came to market earlier in the week, said Ron Banaszek, co-head of public finance and lead underwriter at Blaylock Van.

There are a lot of "great technology solutions" out there, said Dan Silva, CEO and cofounder of Adaje.

While technology has lowered entry minimums, making it more accessible to all types of investors, the client base for SMAs primarily consists of high-net-worth individuals.