FOMC

Munis underperformed a UST rally, which had everything to do with Powell's speech at the Jackson Hole symposium and future Fed action, said Cooper Howard, a fixed income strategist at Charles Schwab.

KC Mathews, executive vice president and chief market strategist at Commerce Trust will break down the FOMC meeting.

Trump advisers are impressed with Waller's willingness to move on policy based on forecasting, rather than current data, and his deep knowledge of the Fed system as a whole, the people said.

Miran, if nominated and approved by the Senate, is only expected to serve a term that expires in January, according to the person, who requested anonymity to discuss internal deliberations.

The Minneapolis Fed chief added that tariffs still represent a significant uncertainty and it's unclear what impact they'll have on inflation.

The FOMC held rates steady at the conclusion of its meeting Wednesday and offered no hints regarding a September move.

Although the Federal Reserve is not expected to cut rates at this meeting, the market is closely watching for signs of a September easing and how the divide among officials plays out.

"Municipal outperformance against taxable sectors has moved short-term ratios on or through their 252-day moving averages, while intermediate and long maturities are holding at or above average ranges," said Kim Olsan, senior fixed income portfolio manager at NewSquare Capital.

The markets are waiting for the Federal Open Market Committee to make its next move.

"We have to navigate policy not only depending on how the environment evolves, but also with keeping those two objectives in mind," Daly said.