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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

September 17, 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:


September 23, 2025


Macro update



The Fed lowered the target interest rate range by 25 basis points (bps), making the new target range 4.00% to 4.25%. The median dot plot now implies two additional 25 bps cuts this year. That’s 75 bps in total in 2025. Guidance remained cautious, and chair Jerome Powell framed this as an insurance cut amid a softer labor market.


Fed governor Stephen Miran was the only official to dissent, preferring a larger, half-point cut.


In his press conference, Powell highlighted labor market softness as central to the committee’s decision, “I can no longer say (the labor market) is very solid.” 


In their economic forecast, policymakers slightly upgraded their median outlook for growth in 2026. They also forecast modestly higher inflation next year.


The dollar erased losses and Treasury yields rose post cut, including the five-year yield, which climbed six bps to 3.65%.


Municipal bond update



Benchmark AAA municipal yields took a breather after the prior week’s rally. On the week, two-year yields rose two bps, five- and ten-year yields went down by two bps and 30-year yields dipped by one bps (LSEG MMD, 9/19/2025).


Five- to 15-year A-rated municipal yields ranged from 2.35% to 3.93%, with related taxable-equivalent yields ranging from 3.97% to 6.64%, assuming a combined federal tax rate of 40.8% (LSEG MMD, Parametric, 9/19/2025).


Inflows slowed last week but remained positive for the fifth consecutive week. Muni mutual funds saw approximately $1 billion, with open ends capturing $245 million and ETFs receiving $800 million (JPMorgan, 9/19/2025).


The municipal primary calendar returns this week with $15.8 billion set to price. September’s maturing bonds hitting bondholder accounts, called bond and coupon proceeds, slowed to approximately half of August’s redemptions. This reduced level of potential reinvestment cash elevates the importance of mutual fund flows, which could enhance volatility during periods of heavy new-issue supply (Ipreo, JPMorgan, 9/19/2025).

Municipal Index Yield to Worst


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Source: Bloomberg as of 9/22/2025. 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. 



Corporate bond update



US investment-grade (IG) corporate yields were mixed, but little changed last week. Two-year yields were down two bps, while five- and 10-year yields rose two and four bps, respectively. Corporate yields are lower across the curve year to date (YTD). Two-, five- and 10-year yields have fallen 67, 71 and 50 bps, respectively (Bloomberg, 9/19/2025).


The ICE BofA 1–10 Year US Corporate Index returned 0.03% for the week and 0.81% month to date (MTD). The index outperformed like-duration Treasurys by 0.14% for the week and by 0.38% MTD (Bloomberg, 9/19/2025).


IG mutual funds and ETFs experienced inflows of $3.7 billion, a decrease from the previous week’s inflows of $5.9 billion. Corporate-only funds experienced outflows of $1.1 billion, following the previous week’s outflows of $374 million (JPMorgan, 9/19/2025).


Corporate one- to 10-year IG bond yields have decreased 72 bps YTD and ended last week at 4.4% (Bloomberg, 9/19/2025).



Corporate Index Yield to Worst


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Source: Bloomberg as of 9/22/2025. 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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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.