Municipal bond market shows record issuance momentum. Invesco Municipal Income Fund Class A shares underperformed the S&P Municipal Bond 5+ Year Investment Grade Index in Q4 2025. New municipal issuance reached $143 billion for the quarter, with full year issuance hitting a record $584 billion, surpassing 2024's previous record of $509 billion. The Federal Reserve cut rates twice during the period, reducing the federal funds rate by 0.25% in both October and December. Despite near-term underperformance, Invesco maintains a constructive outlook on the municipal bond market, citing high absolute yields and solid fundamentals as compelling factors. The fund sees attractive opportunities to increase duration positioning following the steepening of the municipal yield curve observed in 2025.
Post from MarketNews_en
Log in to interact with content.