The muni market’s outperformance streak likely has little room left to run, according to Barclays Plc strategists.
State and local government debt posted a 0.6% gain this month — even while Treasuries swung to a small loss — as the market was buoyed by the reinvestment of bond payments and a continuing influx into mutual funds.
But that may mean there’s little upside left: The advance has pushed 10-year tax-exempt bond yields the deepest below those on Treasuries since May 2024. That measure, a closely watched gauge of valuations, indicates munis are already trading at lofty levels.
Bloomberg Markets
By Amanda Albright
January 23, 2026