FOMC

Muni yields remain attractive, said Tom Kozlik, managing director, head of public policy and municipal strategy at HilltopSecurities.

"The threat of having both inflation and unemployment rising simultaneously continues to create a big headache for the Fed's interest policy," said Wells Fargo Investment Institute global fixed income strategist Luis Alvarado.

The specter and economic implications of tariffs coupled with still above-target inflation and a healthy labor market will sideline policymakers at this week's meeting, analysts said, but not everyone agrees when the next rate cut will be.

Get expert analysis of the May FOMC meeting, inflation outlook, and Powell's comments.

Most of Thursday's issuance came from competitive deals, the largest being the Dormitory Authority of the State of New York with $2 billion-plus and California with $889 billion.

With no policy changes expected, analysts are eagerly awaiting the new Summary of Economic Projections for clues about future monetary policy.

Mike Goosay, Chief Investment Officer of Global Fixed Income at Principal Asset Management, breaks down the Federal Open Market Committee meeting, Chair Powell's press conference and the SEP.

Investors added $741.7 million to municipal bond mutual funds in the week ending Wednesday, following $2.078 billion of inflows the prior week, according to LSEG Lipper data.

"There are a lot of moving parts here with the potential to either help or hinder the Fed's quest for price stability and maximum employment" this year, noted BMO Deputy Chief Economist Michael Gregory, who says the Fed will "stand pat."

The Federal Reserve will be more cautious and slow rate cuts going forward, according to minutes of the December Federal Open Market Committee meeting, released Wednesday.