Treasury and municipal yields rose across the curve last week in response to growing tariff pressure and significant market volatility. In Treasuries, 10-year yields moved 47 bps higher and 30-year yields increased 44 bps. Municipal yields increased even more than Treasuries, as 10-year and 30-year yields rose by 69 bps and 65 bps, respectively. At one point last week, the 30-year municipal yield finished the day with a higher rate than the 30-year Treasury yield. Municipal bond funds experienced outflows for the fifth consecutive week, with $3.3 billion exiting funds, the largest figure since June 2022. Headline CPI advanced by 2.4% YoY, while core CPI climbed by 2.8% YoY, marking its slowest growth since March 2021. SuperCore inflation, the Fed’s preferred measure, fell to 3.22% YoY, its lowest level since December 2021. The market is currently anticipating the first rate cut to occur in June. Given the volatility, no healthcare issues priced last week, and participants will continue to assess market conditions going forward as the impact of policy decisions remains uncertain.

Treasury and municipal yields fell across the curve last week in response to last Wednesday’s tariff announcement. In Treasuries, 10-year yields moved 26 bps lower and 30-year yields decreased 23 bps. Municipal yields followed Treasuries lower, as 10-year and 30-year yields fell by 33 bps and 29 bps, respectively. Municipal bond funds experienced outflows for the fourth consecutive week, with $232 million exiting funds, following $573 million of outflows in the prior week. In addition to evaluating the potential impact of the tariff announcement, market participants will be watching for the release of the March CPI report on Thursday. The inflation report is expected to show price increases slowing to 2.6%. Currently, the market is anticipating the first rate cut to occur in June, with a 50% probability of a cut in May. Market participants expect some rate volatility ahead as the impact of policy decisions remains uncertain.