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Munis little changed, USTs cheapen

BY SourceMedia | MUNICIPAL | 06/22/26 04:07 PM EDT By Christina Baker

Munis were little changed on Monday, as U.S. Treasuries cheapened and equities ended mixed.

Muni yields increased by up to two basis points, depending on the scale, with the losses concentrated at the front end and belly of the curve. UST yields rose five basis points, pushing the two- and three-year UST to yearly highs.

Munis have had a muted reaction to swings from USTs for the last week. Chris Brigati, managing director and CIO at SWBC, said he expects that trend to continue unless USTs sell off aggressively.

"Everything in rates is contingent upon what's going on in the discussions with Iran," Brigati said. Municipal rates have grown "a tiny bit weaker in sympathy with [UST] rates, but overall the municipal market has been hanging in very, very well for the past week or so, and we're optimistic and expect that to continue going forward."

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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