Weekly Fixed Income Insights
Track what matters in fixed income: Macro news, policy moves and developments in the municipal and corporate markets.
Rising Bond Yields Are Not Just a US Problem
October 13, 2026
Fixed income portfolio manager Kevin Lynyak talks about global bond yields. Listen now:
The 10-Year Isn't Broken. It's Being Repriced
September 28, 2026
Fixed income portfolio manager Kevin Lynyak talks about how to actually value the 10-Year Treasury. Listen now:
October 13, 2026
Macro update
The Fed’s meeting minutes from September released last week, and they revealed that the board was unanimous in the rate increase. Officials pointed to strong economic activity, resilient domestic spending, high prices for key products like semiconductors and other computer equipment and continued capital ex spending on data centers (Bloomberg, 10/12/2026).
The Institute for Supply Management (ISM) Services Purchasing Managers’ Index—a monthly read on the U.S. service sector’s economic health—came in last week slightly below expectations. However, it remained at a high enough level to signal activity and growth are continuing to expand (Bloomberg, 10/12/2026).
Initial jobless claims fell last week to a multi-year and multi-month low, showing ongoing resilience in the labor market (Bloomberg, 10/12/2026).
This week we’re watching Consumer Price Index (CPI) data on Wednesday and Producer Price Index (PPI) data on Thursday. Month-over-month core CPI is expected at 0.2%, and core year-over-year is expected to tick higher slightly to 2.5% (Bloomberg, 10/12/2026).
Municipal bond update
AAA municipal yields were mixed across the curve last week. Two- and five-year yields declined eight and three bps, respectively, while 10- and 30-year yields rose one and five bps, respectively. This price action left these benchmarks at 3.30%, 3.53%, 3.98% and 5.12%, respectively (LSEG, 10/9/2026).
Five- to 20-year A-rated muni yields closed last week ranging from 3.71% to 5.18%, with related taxable-equivalent yields ranging from 6.27% to 8.75%, assuming a combined federal tax rate of 40.8% (LSEG, Parametric, 10/9/2026).
Muni mutual funds saw inflows of $1.1 billion, with the mix suggesting continued tax-loss harvesting activity, as open-end funds surrendered $2.2 billion and ETFs received $3.3 billion (LSEG, JPMorgan, 10/7/2026).
Munis underperformed last week, depressing their year-to-date return to -3.51%, while the Bloomberg US Treasury Index had a positive week, improving its year-to-date (YTD) return to -2.43% (Bloomberg, 10/9/2026).
Municipal Index Yield to Worst
Sources: LSEG, Parametric, 10/13/2026. 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
The ICE BofA 1-10 Year US Corporate Index returned 0.39% for the week and 0.40% month to date (MTD). The index outperformed like-duration Treasurys by 0.14% for the week and by 0.09% MTD. With interest rates falling and credit spreads compressing, the index produced a positive total and excess return. YTD returns stand at -0.99% (Bloomberg, 10/9/2026).
U.S. investment-grade (IG) corporate yields decreased across the curve last week. Two-, five- and 10-year yields decreased six, seven and six bps, respectively. Corporate yields are higher YTD, with two-, five- and 10-year yields up 132, 131 and 112 bps, respectively. Corporate one- to 10-year IG bond yields, which have increased 128 bps YTD, ended last week at 5.8%. This was the first week in six weeks that yields declined week over week (Bloomberg, 10/9/2026).
IG mutual funds and ETFs experienced inflows of $10.8 billion, an increase in flows from the prior week’s inflows of $1.7 billion. Corporate-only funds recorded inflows of $4.5 billion following last week’s outflows of $864 million. The first of the month tends to increase the amount of inflow but this was still the highest weekly inflow since June and well above the four-week average of $4.9 billion (JPMorgan, 10/9/2026).
Corporate Index Yield to Worst
Source: Bloomberg, 10/13/2026. 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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