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
October 13, 2025
Fixed income portfolio manager Kevin Lynyak shares his insights into the current bond market. Listen now:
Fixed Income Five
September 18, 2025
Fixed income portfolio manager Kevin Lynyak shares his insights into the current bond market. Listen now:
October 7, 2025
Macro update
Q3 was a strong quarter, with global equities and fixed income advancing as economic growth continued and tariff impacts better than feared. The Fed resumed rate cuts in September, offering further support for Treasurys.
A broad Government shutdown began October 1, halting nonessential federal operations. Morgan Stanley economists expect each week of shutdown to shave approximately 0.1% from GDP growth.
Q2 GDP was revised up to +3.8% annualized, and Atlanta Fed GDP is tracking at +3.8% for Q3, underscoring resilient consumer spending (Bloomberg, 10/1/2025).
The September jobs report was delayed by the government shutdown, but the ADP employment report showed a decline of 32,000 compared with expectations for and increase of 50,000 (Bloomberg, 10/3/2025). Rates moved lower, with Fed fund futures pricing in cuts for the final two meetings of the year.
Job openings ticked up to 7.23 million, while hiring slowed and the quits rate slipped to 1.9%, matching the lowest since the start of COVID-19 (Bloomberg, 10/3/2025). The data suggest a balanced but softening labor market, with slower hiring and increased layoffs.
The Supreme Court rejected the administration’s attempt to immediately fire Federal Reserve governor Lisa Cook, ruling she can remain in her position until at least January, when justices are scheduled to hear arguments in the case (Bloomberg, 10/3/2025).
Municipal bond update
Benchmark AAA municipal yields were mixed last week, with yields on bonds maturing inside of 10 years up one to two basis points (bps) and yields on bonds maturing 11 years and longer down five bps (LSEG MMD, 9/26/2025).
Five- to 15-year A-rated municipal yields now range from 2.52% to 3.93%, with related taxable-equivalent yields ranging from 4.26% to 6.64%, assuming a combined federal tax rate of 40.8%. Turning to longer bonds, 20- to 30-year A-rated bonds range from 4.41% to 4.66%, with taxable-equivalent yields ranging from 7.45% to 7.87% (LSEG MMD, Parametric, 10/6/2025).
Muni mutual funds saw inflows of $189 million, with open-end funds showing a small outflow of $41 million after 19 straight weeks of inflows. Turning to ETFs , they had inflows of $230 million, the sixth consecutive week of inflows (JPMorgan, 10/6/2025).
The municipal primary calendar this week jumps to more than $12 billion, up from $7 billion last week. The Street anticipates more elevated supply weeks to follow through the end of October (Ipreo, JPMorgan, 10/06/2025).
Municipal Index Yield to Worst
Sources: LSEG, Parametric, 10/3/2025. 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 decreased across the curve last week. Two-, five-, and 10-year yields fell seven, six and seven bps, respectively. Corporate yields are lower across the curve year to date (YTD). Two-, five- and 10-year yields have fallen 65, 67 and 49 bps, respectively (Bloomberg, 10/3/2025).
The ICE BofA 1–10 Year US Corporate Index returned 0.37% for the week and 0.71% in September. The index outperformed like-duration Treasurys by 0.07% for the week and by 0.35% in September (Bloomberg, 10/3/2025).
IG mutual funds and ETFs experienced inflows of $10.6 billion, an increase from the previous week’s inflows of $7.9 billion. Corporate-only funds experienced inflows of $1 billion, following the previous week’s inflows of $2.1 billion (JPMorgan, 10/3/2025).
Corporate one- to 10-year IG bond yields have decreased 68 bps YTD and ended last week at 4.5% (Bloomberg, 10/3/2025).
Corporate Index Yield to Worst
Source: Bloomberg as of 10/7/2025. 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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