# 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.
- Title: Thornburg Municipal Bond Funds Q3 2026 Commentary | Shortify
- Summary: U.S. municipal bonds lost 6.35% in Q3 2026 as inflation fears and Fed hikes pushed yields to multi-decade highs.
- Keywords: thornburg municipal bond funds, q3 2026, municipal bond market, treasury yields, bloomberg municipal bond index, inflation scare, federal reserve, treasury curve, muni curve, Seekingalpha
- Source: Seekingalpha — https://seekingalpha.com/article/4964081-thornburg-municipal-bond-funds-q3-2026-commentary
- Author: Thornburg Investment Management
- Published: 2026-11-06T16:06:00+00:00
- Read time: 1 min
- Topics: thornburg municipal bond funds, q3 2026, municipal bond market, treasury yields, bloomberg municipal bond index, inflation scare, federal reserve, treasury curve, muni curve, money, business
## 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.
## Key takeaway

Thornburg's municipal bond funds dropped 6.35% in Q3 2026 due to rising inflation and Federal Reserve rate hikes.