Municipal Weekly No Fireworks in July

Research evidence excerpt

Municipal Weekly No Fireworks in July

FICC Research

Municipal Research

2 July 2026

Municipal Weekly

No Fireworks in July SIGNATURE

Heavy redemptions and somewhat lighter issuance should

support munis in early July. That said, valuations remain rich,

credit spreads are tight, and upside is increasingly limited. Mikhail Foux +1 212 526 7849

The belly of the curve is more vulnerable, while the long end mikhail.foux@barclays.com

should continue to benefit from supportive technicals. BCI, US

Grace Cen

+1 212 526 3571

• Upgrades continue to outpace downgrades, but the margin has narrowed considerably grace.cen@barclays.com

compared with the past several years, indicating that the credit cycle is becoming less BCI, US

supportive. This trend is particularly evident for hospitals, higher education and, more

Francisco San Emeterio

recently, local governments, all of which have experienced a notable increase in the share of +1 212 526 7113

downgrades. francisco.sanemeterio@barclays.com

BCI, US

• We take a closer look at Texas school districts, highlighting recent credit trends, key risks, and

select opportunities that we believe offer relative value.

• Puerto Rico has been the standout performer within the high-yield municipal market, with

total returns approaching 6% year-to-date. While the strong performance likely limits upside

potential, we highlight several areas of relative value within the complex.

• Two bipartisan bills have been introduced in Congress that would eliminate the ability of

governments to issue tax-exempt bonds for the construction of professional sports stadiums.

• The 20-City Case-Shiller Home Price Index declined in April for a third consecutive month. The

weakness was relatively broad-based, with 11 of the 20 metro areas posting monthly price

declines.