From Seekingalpha · Thornburg Investment Management · · 40s
Thornburg Municipal Bond Funds Q3 2026 Commentary
U.S. municipal bonds lost 6.35% in Q3 2026 as inflation fears and Fed hikes pushed yields to multi-decade highs.
In brief
U.S. municipal bonds lost 6.35% in Q3 2026 as inflation fears and Fed hikes pushed yields to multi-decade highs. Thornburg's municipal bond funds dropped 6.35% in Q3 2026 due to rising inflation and Federal Reserve rate hikes. Originally reported by Seekingalpha.
Q3 2026 Municipal Bond Performance
U.S. municipal bonds had their worst quarter since 1981 with the Bloomberg Municipal Bond Index returning -6.35%.
Muni vs. Treasury Yields
Tax-exempt yields rose 120-140 basis points on the AAA muni curve versus 70-80 basis points across the Treasury curve.
Market Drivers
An energy-driven inflation scare and a hawkish Federal Reserve turn pushed Treasury yields to multi-decade highs.
The big picture
Thornburg's municipal bond funds dropped 6.35% in Q3 2026 due to rising inflation and Federal Reserve rate hikes.
