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Weekly Fixed Income Insights


Track what matters in fixed income: Macro news, policy moves and developments in the municipal and corporate markets.

Fixed Income Five: January FOMC

January 29, 2026

Fixed income portfolio manager Kevin Lynyak shares his insights into the current bond market. Listen now:

Fixed Income Five: Preferred Securities Outlook for 2026

January 22, 2026

Fixed income portfolio manager Kevin Lynyak shares his insights into the current bond market. Listen now:


February 18, 2026


Macro update



January nonfarm payrolls rose by 130,000, materially above consensus (by approximately 55,000), with the unemployment rate edging down to 4.3%. Job gains were narrowly concentrated, led by health care, social assistance and construction, while several cyclically-sensitive sectors remained soft. Overall, the report points to a labor market that’s still expanding, but at a subdued, late-cycle pace rather than re-accelerating (Bloomberg, 2/13/2026).


Despite the strong payrolls print, market reaction was muted. The reason lies in annual benchmark revisions, which painted a much weaker picture of last year’s labor market. Payroll levels from April 2024 through March 2025 were revised down by approximately 900,000, confirming that previously reported job growth substantially overstated underlying momentum. In effect, the labor market entered 2026 on a softer footing than headline data had predicted. Much of this was already expected by the market (Bloomberg, 2/13/2026). 


This week brings a full calendar of data releases, including durable goods orders, housing starts, industrial production and capacity utilization; the Federal Open Markets Committee meeting minutes from January; Personal Consumption Expenditures (PCE) and core PCE; persona income and spending; and 4Q25 GDP (Bloomberg, 2/13/2026).


Municipal bond update



AAA municipal yields were lower across the curve last week. Two-year yields were down four basis points (bps), five- and 10-year yields dipped by four and seven bps, respectively, and 30-year yields were three bps lower. This price action left these benchmarks at 2.07%, 2.14%, 2.53% and 4.26%, respectively (LSEG, 2/13/2026).


Five- to 30-year A-rated muni yields closed last week ranging from 2.32% to 4.62%, with related taxable-equivalent yields ranging from 3.92% to 7.8%, assuming a combined federal tax rate of 40.8% (LSEG, 2/13/2026).


Muni mutual funds saw net inflows last week of $1.6 billion, with ETFs attracting $865 million and open-end funds bringing in $711 million. This marks the 12th consecutive week of inflows. (JPMorgan, 2/11/2026).


Tax-exempts underperformed Treasurys last week, with the Bloomberg Municipal Bond Index increasing 0.39%, compared with a 0.91% gain for the Bloomberg US Treasury Index. Munis are now up 1.63% year to date (YTD), compared with Treasurys’ 1.15% increase (Bloomberg, 2/13/2026).


Muni issuance eases to just $7.2 billion this week, with the break in the action likely due to the holiday on Monday. We expect a return to the +$10 billion run rate next week. (Ipreo, 2/13/2026).


Municipal Index Yield to Worst


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Sources: LSEG, Parametric, 2/13/2026. Assuming a top federal tax rate of 37%, plus 3.8% net investment income tax rate, 40.8% combined. For illustrative purposes only. It is not possible to invest directly in an index. Past performance is no guarantee of future results.



Corporate bond update



US investment-grade (IG) corporate yields were lower across the curve last week. Two-, five-, and 10-year yields decreased five, 10 and 12 bps, respectively. Corporate yields are lower YTD, with two- five-, and 10-year yields down 10, 12 and 11 bps, respectively. (Bloomberg, 2/13/2026).


The ICE BofA 1–10 Year US Corporate Index returned 0.5% for the week and 0.71% month to date (MTD). The index underperformed like-duration Treasurys by -0.13% for the week and by -0.2% MTD (Bloomberg, 2/13/2026).


IG mutual funds and ETFs experienced inflows of $9.4 billion, a decrease from the previous week’s inflows of $12.9 billion. Corporate-only funds experienced inflows of $3.1 billion, following the previous week’s inflows of $1.9 billion (JPMorgan, 2/13/2026).


Corporate one- to 10-year IG bond yields, which have decreased 11 bps YTD, ended last week at 4.4% (Bloomberg, 2/13/2026).



Corporate Index Yield to Worst


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Source: Bloomberg as of 2/18/2026. Past performance is no guarantee of future results. The index performance is provided for illustrative purposes only and is not meant to depict the performance of a specific investment.



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The views expressed are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Parametric and its affiliates disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Parametric are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Parametric strategy. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results. All investments are subject to the risk of loss. Prospective investors should consult with a tax or legal advisor before making any investment decision. Please refer to the Disclosure page on our website for important information about investments and risks.