Overview
– Q2 2025 municipal bond market faces pivotal shifts due to Fed rate cut signals, credit divergences, and macroeconomic risks.
– Strategic duration management gains traction as long-dated munis offer tax-equivalent yields exceeding 5% for top tax bracket investors.
– Credit selection emphasizes geographic diversification, favoring fiscally strong states like Texas while avoiding underfunded pension jurisdictions.
– Macroeconomic tailwinds from potential TCJA expiration and yield curve steepening contrast with tariff risks requiring sector-specific risk adjustments.
ainvest.com
Written by Cyrus Cole
Tuesday, Sep 23, 2025