Weekly Fixed Income Insights
Track what matters in fixed income: Macro news, policy moves and developments in the municipal and corporate markets.
Preferred Securities: Recap & Outlook
July 7, 2026
Fixed income portfolio manager Kevin Lynyak talks about five things you need to know about the preferred and hybrid market this month . Listen now:
FOMC Recap: A New Fed, A New Playbook
June 24, 2026
Fixed income portfolio manager Kevin Lynyak on the latest updates from the FOMC meeting. Listen now:
July 7, 2026
Macro update
Labor-market data softened in June, but it didn’t signal a sharp deterioration in hiring conditions. Nonfarm payrolls increased by 57,000, while prior months were revised lower by a combined 74,000 jobs. The three-month private payroll average slowed to 111,000, suggesting hiring momentum is cooling but not collapsing (Bloomberg, 7/2/2026).
The decline in the unemployment rate overstated labor-market strength. The unemployment rate fell to 4.2%, but the sharp decline in labor-force participation drove the move. The prime-age participation fell to 83.3% from 83.9%. Without the participation decline, the unemployment rate would have moved higher (Bloomberg, 7/2/2026).
Treasury markets steepened despite the softer payroll report. Front-end hike pressure eased, but longer maturity yields moved higher as global rates pressure weighed on duration. The 10-year Treasury yield rose roughly 11 basis points (bps) to 4.48%, while the 30-year increased approximately 12 bps (Bloomberg, 7/2/2026).
Risk assets looked through the labor-market softness. The S&P 500® gained approximately 1.8%, credit spreads tightened slightly and equity leadership broadened beyond crowded AI and memory winners into financials, healthcare, consumer, software, transports, regional banks and small caps (Bloomberg, 7/02/2026).
Looking ahead, this week’s economic calendar includes ISM Services, the June Federal Open Market Committee (FOMC) minutes and existing home sales (Bloomberg, 7/2/2026).
Municipal bond update
AAA municipal yields were mixed across the curve last week. Two- and five-year yields declined one and two bps, respectively, while 10-year yields rose one bps and 30-year yields fell one bps. This modest price action left these benchmarks at 2.35%, 2.59%, 2.96% and 4.20%, respectively (LSEG, 7/2/2026).
Five- to 20-year A-rated muni yields closed last week ranging from 2.77% to 4.11%, with related taxable-equivalent yields ranging from 4.68% to 6.94%, assuming a combined federal tax rate of 40.8% (Parametric, LSEG, 7/2/2026).
Muni mutual fund flows remained positive, with $1.7 billion of inflows. ETFs attracted $884 million, while open-end funds garnered $786 million (Lipper, JPMorgan, 7/1/2026).
This week's calendar returns to trend with $10.2 billion scheduled to enter the primary market (Ipreo, 7/2/2026).
Municipals continued to outperform Treasurys on a year-to-date basis, with the Bloomberg Municipal Bond Index returning 2.23% through last week, compared with 0.13% for the Bloomberg US Treasury Index (Bloomberg, 7/2/2026).
Sources: LSEG, Parametric, 7/7/2026. 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
The ICE BofA 1-10 Year US Corporate Index returned -0.15% for the week and 0.13% in June. The index outperformed like-duration Treasurys by 0.11% for the week and by 0.02% in June (Bloomberg, 7/2/2026).
U.S. investment-grade (IG) corporate yields increased across the curve last week. Two-, five- and 10-year yields increased three, eight, and 11 bps, respectively. Corporate yields are higher YTD, with two-, five- and 10-year yields up 65, 49 and 31 bps, respectively (Bloomberg, 7/2/2026).
IG mutual funds and ETFs experienced inflows of $12.7 billion, an increase from the previous week’s inflows of $7 billion. Corporate-only funds experienced inflows of $4.1 billion, following the previous week’s inflows of $1.7 billion (JPMorgan, 7/2/2026).
Corporate one- to 10-year IG bond yields, which have increased 47 bps YTD, ended last week at 4.9% (Bloomberg, 7/2/2026).
Corporate Index Yield to Worst
Source: Bloomberg as of 7/7/2026. 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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