Finance

The city's issuer rating was raised a notch to Aaa and ratings for other debt, including for its water and wastewater utility system, were also upgraded.

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.

Inflation concerns have the UST market betting on a "higher-for-longer" interest rate environment, Chris Brigati wrote for SWBC.

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.

Spiking oil prices and incoming news from the Federal Reserve is pressuring UST yields, which are pressuring munis, according to Schwab's Cooper Howard.

Market Intelligence analyst Jeff Lipton breaks down why munis became the fixed-income standout in 1H 2026, as tax-exempt income, SMA demand, healthy supply-demand dynamics, curve positioning, active security selection and spread compression offset geopolitical volatility and shifting Fed expectations.

The buy-side of the muni market is awaiting higher supply, SWBC's Chris Brigati said.

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.

Federal Reserve Board Gov. Christopher Waller says he is OK with dialing down the amount of communication issued by the central bank's monetary policy committee, but doesn't want the central bank to throw out the baby with the bathwater.

The muni market is poised for a strong week, Peter DeGroot wrote for J.P. Morgan, with a "manageable" new-issue calendar, near-record inflows year-to-date and July redemption money.

The first tobacco bond payment default raises the prospect of additional isolated failures, but not a systemic sector collapse, according to Market Intelligence analyst Jeff Lipton, highlighting how vintage, lien, turbo and reserve features can produce sharply different cash flow and liquidity outcomes.

A number of factors are driving rate volatility, but the muni market is better positioned for a strong summer than it has been in a decade, according to Hennion & Walsh's James Pruskowski.

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

Strong offerings and the promise of July redemptions are helping munis weather a rough UST market, according to NewSquare Capital's Kim Olsan.

GFOA Today 2026, day 2

GFOA Today 2026, day 1

The U.S. and Iran have agreed to stop attacks in the Strait of Hormuz, Tim Iltz wrote for HJ Sims, but the tensions have taken a toll on oil prices.