It’s been another volatile year for municipal (muni) investors this year. While generally outperforming
U.S. Treasuries, the Bloomberg Muni Index is on track for its second calendar year of negative
returns—something that has never happened before. But, while volatility will likely persist over the
coming months, we think muni investors may be able to catch a break, especially if the Federal
Reserve (Fed) is done with its aggressive rate hiking campaign. Moreover, the next few months have
historically been favorable for muni investors. So, with still solid fundamentals, the broader muni
market may be in for a year-end rally, which would certainly be a nice reprieve for investors suffering
from one of the worst muni drawdowns on record.

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