Q1 2026 threw a lot at investors: geopolitical tension, rate volatility, and macro uncertainty. Here’s why municipal bonds held up, and why the setup heading into Q2 may be even more compelling.
Key Takeaways
- Despite a noisy Q1, high-quality munis continued to pay investors their interest and principal as intended.
- Muni yields rose faster than Treasuries in Q1, pushing the 30-year muni/Treasury ratio to near two-year highs, up over 2 points since year-end.
- Credit quality remains excellent with state tax collections still running 10%+ higher in key states. This is a rate story, not a credit story.
VanEck
by Drew Anderson
Associate Product Manager
James Colby
Senior Municipal Strategist
April 13, 2026