Technicals are supposed to become slightly more favorable into year-end, said Jeremy Holtz, a portfolio manager at Income Research + Management.

"The knee-jerk reaction of the markets to the Fed meeting (and press conference) was to sell stocks and bonds, because [Fed] Chairman Jerome Powell said that an additional rate cut in December wasn't a sure thing," said Northlight Asset Management Chief Investment Officer Chris Zaccarelli.

The softer-than-expected September consumer price index report, released Friday, reinforced confidence in the likelihood of a Fed rate cut at its October meeting and potentially at its December meeting, said Tom Kozlik, managing director and head of public policy and municipal strategy at HilltopSecurities.

Economists see the Fed ending quantitative tightening soon, but don't agree exactly when.

"Investors were not disappointed," said John Kerschner, global head of securitized products and portfolio manager at Janus Henderson. "Inflation came in softer than expected, leading to a tepid bond market rally" and ensuring a rate cut at the upcoming Federal Open Market Committee meeting.

Federal Reserve Gov. Stephen Miran said Thursday that the central bank's forays into examining climate change and racial justice under the prior administration politicized the Fed. He also argued that Fed officials should limit their comments on economic policies such as tariffs.

Federal Reserve Gov. Michael Barr called for a cautious approach, emphasizing the possibility that tariffs will create persistent inflation. 

Will the Federal Reserve cut rates in October? BNP Paribas Chief U.S. Economist James Egelhof discusses the meeting and Chair Jerome Powell's press conference.

Federal Reserve Vice Chair Philip Jefferson said despite the near term cloudiness to economic projections, he does expect inflation to resume its downward trajectory next year and reach the Fed's 2% inflation target in the coming years.

Seven filings were submitted in response to President Donald Trump's request for the Supreme Court to remove barriers from ousting Federal Reserve Gov. Lisa Cook before litigation proceeds. Most filings argued for the Court to deny the president's application.

Federal Reserve Bank of Kansas City President Jeff Schmid said that the central bank should continue its focus on curbing inflation, as the job market is "largely in balance."

Secondary selling pressure and the larger calendar weighed on the market Tuesday.

By the close, muni yields were bumped up to four basis points, depending on the curve, while UST yields rose two to five basis points.

The White House said it will appeal a circuit court ruling allowing Federal Reserve Gov. Lisa Cook to remain on the central bank board while her lawsuit challenging her dismissal is litigated.

Despite the expected rate cut, analysts will be watching the Federal Open Market Committee's actions for other reasons.

Investors added $2.183 billion to municipal bond mutual funds in the week ended Wednesday, following $623.3 million of inflows the prior week, according to LSEG Lipper data.

The White House has appealed a D.C. District Court ruling allowing Federal Reserve Gov. Lisa Cook to remain on the Fed board pending the outcome of her challenge to President Trump's moves to fire her.

October is looking to be another blockbuster month for supply, with several $1 billion-plus deals on the shadow calendar, said Pat Luby, head of municipal strategy at CreditSights. 

The Senate Banking Committee voted 13-11 to favorably recommend Stephen Miran's nomination for the Federal Reserve Board to the full Senate.

Monday's rally is a "continuation of what we are seeing," as the market is actively repositioning where it needs to go, said Alice Cheng, director of municipal credit and investor strategy at Janney.