The Bond Buyer's 2025 Infrastructure Report
Market confidence in construction and material costs have impacted in the face of President Trump’s tariffs. Additionally, infrastructure funding capabilities and Medicaid cuts influencing issuer credits have also been impacted to some degree.
The Bond Buyer’s 2025 Infrastructure Report surveyed 104 municipal finance investors and sell-side experts, as well as issuers and public-sector professionals, on a variety of topics including primary infrastructure areas for investing, influences on financing outlooks for 2026, market fluctuations and more.
Top findings from the report- Political dysfunction is the largest challenge to infrastructure.
- Current legislative efforts aren't enough to meet funding needs.
- Interest rates, inflation and tariffs all plague infrastructure projects.
- Different regions expressed various levels of concern over Medicaid cuts.
The Bond Buyer's exclusive research is highlighted in the interactive charts below. Mouse over each section for more detail, and click on the chart labels to show or hide sections.
This item is part of a series diving into new data from The Bond Buyer, so check back for the latest updates.
Challenging times for infrastructure
Across all respondent categories, government and business professionals identified political dysfunction as by far the largest challenge for infrastructure in 2026, pulling in 47% of responses.
This dysfunction has surfaced in places such as New York, where the U.S. Department of Transportation
Experts also expressed their concern over confidence in markets/market volatility, at 10% of responses; inflation at 9%; loss of business/revenue at 6% and a three-way tie among climate change/weather events, regulatory requirements/changes and supply-chain concerns, at 4% each.
Rising interest rates and challenges with technology were at the bottom of the list, at 3%. The remaining 3% of respondents do not anticipate any infrastructure challenges next year.
Key takeaway: Political dysfunction is the dominant challenge to both government and municipal infrastructure in 2026.
Legislative letdown
More than half of municipal-finance professionals surveyed, at 57%, are not confident that current federal legislative actions and policies will meet needed infrastructure investments in the U.S.
One recent example is how transportation lobbyists and municipal finance professionals have begun flocking to Congress in advance of an upcoming surface transportation bill to
Thirty percent of respondents were "somewhat confident" that the current legislative framework will be enough to support needed infrastructure investments, compared to 8% who were "confident" and 5% who were "very confident."
Key takeaway: Fifty-seven percent of experts surveyed feel that federal legislative efforts won't be enough to meet infrastructure funding needs.
Interest woes
More than three-quarters of respondents surveyed are worried to some degree about the impact of interest rates on state and local governments' ability to fund infrastructure.
The largest share of respondents, at 39%, said they are "a little worried," followed by 32% who are "moderately worried" and 8% who are "very worried." Twenty-two percent said they are "not worried" about the impact of interest rates at all.
Key takeaway: Many respondents are concerned about interest rates impacting infrastructure funding and planning, with 40% either very or moderately worried.
Inflation impact worries by company type
Certain segments of the respondents expressed deeper concern about interest rates.
For issuers and public-sector experts, 97% are worried to some degree about how inflation will affect state and local governments' ability to both fund and plan infrastructure projects, with the largest share saying they were "moderately worried." Only 3% said they were not worried about inflation's influence on funding capabilities.
Sell-side professionals were marginally less worried, with the share of "not worried" responses jumping to 12%, from 3%. Eighty-eight percent of respondents said they were worried at some level about inflation, with the largest share being "a little worried."
Investors were the most varied in their level of concern; 9% said they were "very worried," 35% said they were "moderately worried," 39% said they were "a little worried" and 17% said they were "not worried."
Key takeaway: Issuers and public-sector experts expressed the greatest worry about inflation impacting infrastructure planning and funding.
Building up worries
As an extension of inflation, higher construction costs are entering the conversation. Respondents shared their level of worry over how effective municipalities will be in accomplishing infrastructure projects at scale.
The majority of respondents said they were very to moderately worried about higher costs hindering infrastructure projects, coming in at 28% and 44% respectively.
Twenty-four percent responded that they were only "a little worried" and 4% said they weren't worried at all.
Key takeaway: Rising construction costs are fueling municipal professionals' worries about the ability to finish infrastructure projects at scale.
Taxing effect on infrastructure
Tariffs have quickly grown to become a predominant concern among municipal-finance leaders overseeing infrastructure campaigns.
Thirty-six percent of respondents said they were "very worried" about the impact of tariffs on materials essential for infrastructure projects, followed closely by 33% who said they were "moderately worried."
Nineteen percent of respondents said they were "a little worried" and 12% said they were "not worried" about tariffs on materials.
Key takeaway: More than one-third of respondents are very worried about the ability to execute infrastructure projects if tariffs lead to higher material costs.
Medicaid cuts injure market confidence in issuer credits
Professionals from different municipal-finance markets expressed different levels of worry over federal cuts to Medicaid. These cuts, included in the One Big Beautiful Bill Act, affect issuer credits tied to the funding stream, which includes state credit and rural hospitals.
Those in the northeast expressed the greatest concern, with 32% responding that they were "very concerned," 41% responding "moderately concerned" and 11% saying they were "a little concerned." Seventeen percent were either unsure or not concerned to any degree.
In the west, the share of experts who were "very concerned" stayed the same at 32% while those who were "moderately concerned" fell to 27% and those who said they were "a little concerned" rose slightly, to 18%. Eighteen percent said they were not concerned and 5% were unsure.
Southerners represented the largest share of respondents who were "very concerned" about the cuts, at 34% for that region. Six percent were "moderately concerned," followed by 22% who responded that they were "a little concerned" and a combined 37% who were either "not concerned" or were unsure.
The midwest recorded the most varied responses. Twenty percent of respondents each said they were "very concerned" to "moderately concerned," while 13% said they were "a little concerned." Forty-six percent said they were either "not concerned" or were unsure.
Key takeaway: The northwest region has the greatest share of professionals concerned about Medicaid cuts.
Will funding hopes be nurtured or dashed?
Funding was a popular theme among respondents who expressed their hopes for the upcoming transportation reauthorization bill, or any other infrastructure-related legislation in 2026.
Above is a sampling of some responses from surveyed experts.
Key takeaway: Most professionals are hopeful that the bill will create opportunities for increased funding, but worry that the current political climate will influence the flow of capital.
