2026 HJ Sims Private Wealth Management Summit

HJ Sims is pleased to announce the 2026 Private Wealth Management Summit. The internal Summit will be hosted on October 12th through October 15th at The Breakers in Palm Beach, FL.

The Summit offers HJ Sims financial professionals the chance to connect, learn, and exchange insights through educational sessions, collaborative discussions, and shared experiences. Together, we aim to deepen industry expertise and strengthen our ability to serve clients at the highest level.

Let us know if you will be there! Please let us know your check-in & check-out dates if you will need a hotel room by Monday, September 7th (Marketing will coordinate hotel rooms for all attendees – attendees are responsible for booking flights and transportation).

Sponsored by:

PCS
Nuveen
NexPoint
Gladstone

The information contained herein is subject to change without notice. Under no circumstances shall this constitute an offer to sell or solicitation of an offer to buy. Investments involve risk including the possible loss of principal. HJ Sims is a member of FINRA and SIPC, and is not affiliated with The Breakers Palm Beach, Preferred Capital Securities, Nuveen, NexPoint, or Gladstone Capital Corporation.

Curve Commentary: August 4, 2026

Overview

The bond market is showing some relief this morning on news that discussions are underway between the US and Iran following the US reportedly calling-off a major attack on the Islamic Republic.  After touching $90 last week, ICE Brent Futures are now back in the low $80’s this morning.  However, anxieties in the capital markets remain high following last week’s Fed meeting, which left many market participants unconvinced of the Fed’s undertaking to fight inflation.  The impression of a stable labor market combined with elevated energy prices continues to feed a narrative for Fed rate hikes later this year.  Fed funds futures are now pricing in the likelihood of a Fed rate hike of 25bp at over 90% by the October 27-28 meeting; which, as of early last week, was thought to occur as soon as September.

Implied Overnight Rate & Number of Hikes/Cuts

Insights and Strategy

In response to last week’s Fed meeting, the Treasury curve fell for maturities shorter than five-years as markets trimmed expectations of future rate hikes while the long end saw rates rise due to long-term inflation expectations.  Overall, the Treasury curve steepened while municipals demonstrated more resolve on the short-end of the curve and only sold-off slightly, by about three-basis points, on the long-end.  Inflation concerns with volatile energy prices continue to hold the long-end of the Treasury curve above 5% for maturities past 15-years.  The slope at the long-end of the municipal yield curve, past 20-years, remains relatively flat with a total slope of 30 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield 91% of the 30-year curve versus 75% for 10-year maturities.

Over the past week, Municipal/Treasury ratios have generally declined (richened), with the largest changes occurring from on the long-end.  However, over the past month we have seen a notable cheapening in ratios, particularly around the 10-year tenor.  One-year ratios are now just above 60% and 10-year ratios are now over 70% of Treasuries.  However, 20-year ratios remain just below 80% and 30-year ratios are well below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 20-year part of the municipal yield curve remains attractive with steeper slopes.  Nevertheless, the shorter end of the yield curve has recently seen steeper slopes with 84 bps of slope from one to 10 years and 50 bps of slope from four to eight years.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors. 

The Municipal the new issue calendar ramps-up this week with US state and local governments expected to sell around $18 billion of bonds.  Notable deals include: the City of New York, NY, which plans to sell $1.5 billion; Intermountain Healthcare Obligated Group has scheduled $1.11 billion; San Francisco City & County Public Utilities Commission plans to sell $814.4 million in Wastewater Revenue Bonds; and, Black Belt Energy Gas District is expected to bring $800 million to the market.  Last week, investors added approximately $761 million to municipal bond mutual funds, up from $174 million the prior week, according to LSEG Lipper data.  Furthermore, redemptions and maturities in the next 30-days are expected to total $32.5 billion, according to data compiled by Bloomberg.  Overall, investors continue to support munis, but new issue pricings remain in focus.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: July 27, 2026

Overview

The bond market is showing some relief this morning following three straight nights of the US and Iran halting attacks.  After touching $100 last week, ICE Brent Futures are now back to around $90 this morning.  However, anxieties in the capital markets remain high as the bond market pays close attention in anticipation of this week’s Fed meeting.  Last Thursday, initial jobless claims fell to 187,000, the lowest level since 1969 according to Labor Department data.  The impression of a stable labor market combined with elevated oil prices is supporting the narrative for Fed rate hikes later this year.  Fed funds futures are now pricing in a Fed rate hike of 25bp at the September 15-16 meeting; which, as of last week, was thought to occur as soon as October.

ICE Brent Crude Oil Futures

Insights and Strategy

In response to last week’s aggressions, the Treasury curve jumped a bit around the policy sensitive two-year tenor while the municipal yield curve generally shifted higher.  Inflation concerns with volatile energy prices continue to hold the long-end of the Treasury curve above 5% for maturities past 20-years.  With tensions increasing in the Middle East last Thursday and rising oil prices, the municipal yield curve experienced some of the largest cuts in months with yields increasing roughly 12 bps per year from 2027 to 2056.  Overall, the municipal curve is now about a 20 bps higher this week following a parallel shift upward with the largest moves around the 15-year tenor and the smallest moves around the 1-year tenor, as investor position defensively.  The slope at the long-end of the municipal yield curve, past 20-years, remains relatively flat with a total slope of 30 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield 91% of the 30-year curve versus 74% for 10-year maturities.

Over the past week, Municipal/Treasury ratios have generally increased (cheapened), with the largest changes occurring from one to 10 years.  One-year ratios are now just above 60% and 10-year ratios now over 70% of Treasuries.  However, 20-year ratios remain just below 80% and 30-year ratios are well below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 20-year part of the municipal yield curve is attractive with steeper slopes and yields at approximately 80% of Treasuries.  However, the shorter end of the yield curve has recently seen slopes steepening with 83 bps of slope from one to 10 years and 50 bps of slope from four to eight years.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors.

The Municipal new issue calendar remains elevated this week with US state and local governments expected to sell around $12.4 billion of bonds.  Notable deals include: the Henry Ford Health System Obligated Group, which plans to sell $1.3 billion; Advent Health Obligated Group has scheduled $1.03 billion; Long Island Power Authority is expected to offer $946.1 million; and, County of Harris, Texas has a $665 million deal on the calendar.  Last week, municipal bond mutual fund inflows declined significantly from $1.36 billion of inflows the prior week to $174 million last week, according to LSEG Lipper data.  Overall, investors continue to support munis but new issue pricings remain in focus.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: July 20, 2026

Overview

This morning, the war in Iran continues to make headlines amid the possibility of a 10-day ceasefire.  With shipping traffic through the Strait of Hormuz reportedly at a virtual standstill, we are seeing some relief in oil prices this morning as optimism lifts for a potential peace deal.  Last week, reports on US consumer and producer prices, came in much cooler than economists expected.  This is important because these are the final inflation prints this month before the Fed’s meeting next week.  As a result, Fed funds futures are now pricing in a Fed rate hike of 25bp by the October 27-28 meeting (97.5%); which, was previously thought to occur as soon as September.  The current outlook for Fed policy has shifted from two quarter-point hikes by mid-2027, to one hike this year and possibly none next year with declining likelihood starting in June 2027.

Implied Overnight Rate & Number of Hikes/Cuts

Insights and Strategy

In response to last week’s inflation news, the Treasury curve dipped around the policy sensitive two-year tenor while the municipal yield curve shifted higher in response to technical factors.  Inflation concerns with volatile energy prices continue to hold the long-end of the Treasury curve above 5% for maturities past 20-years.  When comparing the municipal yield curve to the Treasury curve, the first 6 months immediately stand-out with the inverted shape of the municipal curve sharply contrasting with the steeply sloped Treasury curve.  Also, as discussed in greater detail below, record issuance and rich ratios are creating some resistance in munis.  The slope at the long-end of the municipal yield curve, past 20-years, remains relatively flat with a total slope of 30 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield almost 91% of the 30-year curve versus 72.5% for 10-year maturities.

Over the past week, Municipal/Treasury ratios have generally increased (cheapened), although one-year ratios remain notably well below 60%.  In recent weeks, ratios have fallen well below several important reference points along the curve.  Ratios for 10-year municipal yields are now well under 70% of Treasuries, 20-year ratios are below 80% and 30-year ratios are below 90% of Treasuries.  However, ratios have improved across the municipal yield curve over this past week, with the largest changes occurring from five to 10 years.  For investors seeking to maximize curve positioning with relative value, the 19 to 21-year part of the municipal yield curve is attractive with slopes of 10 to 13-bps per year and yields around 80% of Treasuries.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors. 

The Municipal the new issue calendar remains elevated this week with US state and local governments expected to sell around $11.2 billion of bonds.  Notable deals include: the New York City Transitional Finance Authority with $1.5 billion, the City of San Antonio Airport has $943.9 million, and West Valley-Mission Community College District is expected to bring $497 million to the market.  Last week, municipal bond investors added approximately $1.4 billion to municipal-bond funds, according to LSEG Lipper Global Fund Flows.  Overall, investors continue to support munis, but new issue pricings remain in focus.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: July 13, 2026

Overview

The war in Iran continues to make headlines with Iran reportedly insisting that ships obtain permission and the US declaring the Strait is open to all vessels.  This uncertainty has resulted in oil continuing to price at higher levels, West Texas Intermediate is back in the mid 70’s this morning.  Inflation concerns with higher energy prices continue to move the long-end of the Treasury yield curve, with maturities past 20-years now eclipsing 5%.  On the short-end, we are experiencing upward pressure around the policy sensitive 2-year tenor amid speculation the Fed will raise rates sooner rather than later.  Fed funds futures are now almost fully pricing in a rate hike of 25bp in September (92%), which, as of last week, was previously thought to not occur until December.  This week we will be closely following the US data on CPI and producer prices as they will be the final inflation prints before the Fed’s meeting later this month.

Implied Overnight Rate & Number of Hikes/Cuts

Insights and Strategy

Treasury curves steepened a bit over the past week, while the municipal yield curve followed in sympathy.  However, the slope of the 10 to 30-year municipal curve remains near the tightest levels seen in over a year.  This flattening is the result of shifting expectation for longer maturities as markets adjust inflation expectations against the strength of the economy.  When comparing the municipal yield curve to the Treasury curve, the first 6 months immediately stand-out with the inverted shape of the municipal curve contrasting with the steeply sloped Treasury curve.  The slope at the long-end of the municipal yield curve, past 20-years, remains relatively flat with a total slope of 34 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield almost 90% of the 30-year curve versus 71% for 10-year maturities.

Over the past week, Municipal/Treasury ratios have generally decreased (richened), with one-year ratios notably well below 60%.  Furthermore, ratios have recently fallen well below several important reference points along the curve.  Ratios for 10-year municipal yields are now well under 70% of Treasuries, 20-year ratios are below 80% and 30-year ratios are below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 19 to 21-year part of the municipal yield curve is attractive with slopes of 10 to 13-bps per year and yields around 80% of Treasuries.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors.

The Municipal the new issue calendar remains elevated this week with US state and local governments expected to sell around $12.5 billion of bonds.  Notable deals include: the New York State Thruway Authority, which plans to sell $2.44 billion; Aquarion Water Authority Water System, with $2.37 billion; New Jersey Turnpike Authority, with $1.06 billion; and, Norton Healthcare Obligated Group is expected to bring $504 million to the market.  In addition, technical conditions remain supportive of the primary market.  Last week, municipal bond investors added approximately $1.4 billion to municipal-bond funds, according to LSEG Lipper Global Fund Flows.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: July 6, 2026

Overview

The Bureau of Labor Statistics released its Employment Situation report last week that noted fewer-than-expected jobs added and a drop in the unemployment rate to 4.2%.  Recently, anxieties have been high regarding the potential for rate hikes under new Fed Chairman Kevin Warsh.  Following last week’s report, fed funds futures are now anticipating the Fed will hike rates 25bp in December which was previously thought to occur as soon as October.  Declining geopolitical tensions and oil prices combined with a more dovish outlook for the Fed could create an accommodative environment for the record issuance we have seen in the municipal market this year.

Implied Overnight Rate & Number of Hikes/Cuts

Insights and Strategy

Treasury curves steepened a bit over the past week, while the municipal yield curve is almost unchanged.  Currently, the slope of 10 to 30-year municipal curve is at the tightest levels seen in over a year.  This flattening is the result of longer maturities responding to declining inflation expectations.  When comparing the municipal yield curve to the Treasury curve, the first 6 months stand-out with the inverted shape of the municipal curve contrasting starkly with the steeply sloped Treasury curve.  Although the yield curve has flattened from 10 to 30-years, Investors continue be rewarded for extending out the yield curve with the steepest yields in the 19-21-year maturity range.  The slope at the long-end of the municipal curve, past 20-years, remains relatively flat with a total slope of 32 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield 90% of the 30-year curve versus 70% for 10-year maturities.

Municipal/Treasury ratios have generally decreased (richened), ratios are now one to two percent lower than a week ago.  Notably, one-year ratios are well below 60%.  Ratios on the long-end for 20-years and longer, are now meaningfully lower.  Municipals have recently fallen well below several important reference points along the curve.  Ratios for 10-year municipal yields are now well under 70% of Treasuries, 20-year ratios are below 80% and 30-year ratios are below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 19 to 21-year part of the municipal yield curve is attractive with slopes of 10 to 13-bps per year and yields around 80% of Treasuries.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors. 

Following last week’s holiday closures, the Municipal the new issue calendar is significantly higher with US state and local governments expected to sell around $15.1 billion of bonds.  Notable deals include: Aquarion Water Authority Water System Revenue Bonds with $2.37 billion, California State University has scheduled $1.8 billion, Massachusetts Port Authority is expected to offer $812 million and Massachusetts Bay Transportation Authority Sales Tax Revenue has $767.4 million on the calendar.  In addition, technical conditions remain supportive of the primary market.  Last week, municipal bond investors added approximately $1.7 billion to municipal-bond funds, according to LSEG Lipper Global Fund Flows.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: June 29, 2026

Overview

Following an escalation of tensions in the Strait of Hormuz, Iran and the US have reportedly agreed to stop mutual attacks.  Although there is an agreement in place, shipowners remain wary of crossing the strait.  As a result, oil prices are up again this morning and we are seeing Treasuries trade off a bit, particularly in the intermediate portion of the yield curve.  While this week is a holiday week with a lighter new issue calendar, accounts are likely to be attentive with over $100 billion in combined July and August redemptions.

West Texas Intermediate Crude Futures

Insights and Strategy

Both municipal and Treasury curves have flattened over the past week.  Currently, the slope of 2 to 10-year Treasuries is less than half of what it was in mid-May and near the tightest levels seen in over a year.  This flattening is the result of shorter-dated Treasuries anticipating rate hikes while longer maturities face inflation uncertainties.  However, the first 6 months of the curves could not be more different, with munis inverted and Treasuries steeply upwardly sloped.  Although the yield curve has flattened, Investors continue be rewarded for extending out the yield curve with the steepest yields in the 19-21-year maturity range.  The slope at the long-end of the municipal yield curve, past 20-years, remains relatively flat with a total slope of 31 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield over 90% of the 30-year curve versus 70% for 10-year maturities.

Municipal/Treasury ratios have generally increased (cheapened) for periods shorter than 10-years, with one-year ratios 1% higher, but still below 60% of Treasuries.  Ratios on the long-end, for 20-yewars and longer, are now slightly lower.  Municipals have fallen well below several important reference points along the curve.  Ratios for 10-year municipal yields are now well under 70% of Treasuries, 20-year ratios are below 80% and 30-year ratios are below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 19 to 21-year part of the municipal yield curve is attractive with slopes of 10 to 13-bps per year and yields around 80% of Treasuries.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors.

Due to the holiday closure later this week, the Municipal the new issue calendar is significantly smaller with US state and local governments expected to sell around $7 billion of bonds.  Notable deals include: Black Belt Energy Gas District with $920 million, Massachusetts Port Authority is expected to bring $812 million, Main Street Energy Inc. has scheduled $585 million and City of San Diego Water has $429.9 million on the calendar.  In addition, technical conditions remain supportive of the primary market.  Last week, municipal bond investors added approximately $633 million to municipal-bond funds, according to LSEG Lipper Global Fund Flows.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: June 22, 2026

Overview

Last week the Federal Open Market Committee (FOMC) voted to hold the benchmark federal funds rate in a range of 3.5% to 3.75%, at the first gathering with Kevin Warsh as “Chairman.”  At the meeting, officials signaled growing support for rate hikes this year with half of the individual Fed members expecting to raise rates by the end of the year.  Furthermore, Warsh repeatedly reiterated the Fed’s commitment to fighting inflation.  Fed rate-hike expectations have recently shortened significantly with Fed Funds Futures pricing in two 25bp moves by March 2027.  Fed funds futures are now anticipating the Fed will hike rates 25bp as soon as October.

Implied Overnight Rate & Number of Hikes/Cuts

Insights and Strategy

The gap between two- and 10-year Treasury yields and between five- and 30-year yields has narrowed to the tightest levels in more than a year.  This flattening is the result of shorter-dated Treasuries anticipating rate hikes while longer maturities price-in a tougher inflation stance.  However, the municipal yield curve has responded in a more even fashion with an almost parallel shift downward with the first six-months remaining inverted.  Although the yield curve has flattened, Investors continue to be rewarded for extending out the yield curve, with the steepest yields in the 18-21-year maturity range.  The slope at the long-end of the municipal yield curve, past 20-years, remains relatively flat with a total slope of 31 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield almost 90% of the 30-year curve versus less than 70% for 10-year maturities.

Over the past week, municipal/Treasury ratios have generally declined for periods shorter than 10-years, with one-year ratios now well below 60%.  Ratios on the long-end, for 20-yewars and longer, are now slightly higher.  Municipals have now fallen well below several important reference points along the curve.  Ratios for 10-year municipal yields are now well under 70% of Treasuries, 20-year ratios are below 80% and 30-year ratios are below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 19 to 21-year part of the municipal yield curve is attractive with slopes of 12 to 13-bps per year and yields around 80% of Treasuries.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors.

The Municipal the new issue calendar remains relatively robust this week with US state and local governments expected to sell over $12 billion of bonds.  Notable deals include: the State of Georgia with $1.57 billion, Massachusetts Bay Transportation Authority Sales Tax Revenue is scheduled to sell $767.4 million, Santa Clara Unified School District is selling $438 million and Central Florida Expressway Authority is expected to bring $430.6 million to the market.  In addition, technical conditions remain supportive of the primary market.  Last week, municipal bond investors added approximately $1.19 billion to municipal-bond funds, according to LSEG Lipper Global Fund Flows.  Furthermore, June tax-exempt reinvestment proceeds are expected to reach approximately$54.5 billion.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: June 15, 2026

Overview

This morning oil prices slid to a three-month low on news the US and Iran reached an agreement to reopen the Strait of Hormuz.  Details of the agreement are still preliminary; but, the Strait of Hormuz is anticipated to reopen following Friday’s signing.  The agreement marks the beginning of 60 days of talks regarding Iran’s nuclear program with the potential for continued military attacks if an understanding isn’t reached.  However, with oil prices currently around $80-85 per barrel, central bankers are now under less pressure to adjust rates than last week.  As a result, Fed rate-hike expectations have shifted further into the future, with Fed Funds Futures not fully pricing in a 25bp move until March 2027.  Although the markets are not expecting the Fed to adjust rates at its meeting this week, markets will be closely following Kevin Warsh’s first Fed meeting as “Chairman.”

West Texas Intermediate Crude

Treasuries rallied over this past week on anticipation of a deal in Iran and the opening of the Strait of Hormuz.  However, munis were little changed with yields only slightly higher from six to 14-years.  Investors continue be rewarded for extending out the yield curve with the steepest yields in the 18-21-year maturity range.  The slope at the long-end of the municipal yield curve, past 20-years, remains relatively flat with a total slope of 32 bps from 21-30-years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield almost 90% of the 30-year curve versus less than 70% for 10-year maturities.

Insights and Strategy

Due to the relative underperformance of munis over the past week, Municipal/Treasury ratios have generally increased over the past week.  Looking back a bit, ratios shorter than 10-years, particularly those under one-year, have become dramatically richer over the past month with one-year and shorter ratios now 7.8% lower.   Municipal bonds have now fallen well below several important reference points along the curve: ratios for 10-year municipal yields are now well under 70% of Treasuries; 20-year ratios are below 80%; and, 30-year ratios are below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 19 to 21-year part of the municipal yield curve is attractive with slopes of 12 to 13-bps per year and yields around 80% of Treasuries.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors.

Despite the abbreviated holiday week, the Municipal the new issue calendar remains relatively robust this week with US state and local governments expected to sell over $11 billion of bonds.  Notable deals include: the State of Washington with $1.52 billion; County of Miami-Dade FL Aviation Revenue has scheduled $637.9 million, New York State Housing Finance Agency is estimated to offer $509.6 million, and the State of Louisiana is expected to bring $375 million to the market.  However, technical conditions remain supportive of the primary market.  Last week, municipal bond investors added approximately $625 million to municipal-bond funds, according to LSEG Lipper Global Fund Flows.  Furthermore, June tax-exempt reinvestment proceeds are expected to reach approximately$54.5 billion.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.

Curve Commentary: June 1, 2026

Overview

Inflation is showing signs of heating-up as the first inflation report under new Federal Reserve chief Kevin Warsh was released last week showing April consumer prices reached their highest level in almost three years.  The personal consumption expenditures price index ticked-up to 3.8% for the 12-month period ended in April, almost double the Fed’s 2% target.  However, this was not unexpected, as economists surveyed by Dow Jones forecasted a 3.8% rate.  In the Treasury Market, inflation expectations have increased anticipation the Fed will hike rates, resulting in the gap between five-year and 30-year yields narrowing to the skinniest levels seen in more than a year.  As a result, we have seen short and intermediate Treasuries underperform over the past month.  However, fund flows in the muni market remain robust, with investors adding approximately $2.3 billion last week, according to LSEG Lipper Global Fund Flows.  As a result, munis have held their ground better than Treasuries over the past month.

Insights and Strategy

Investors continue to be incentivized to extend out the yield curve with the steepest yield slopes in the 18-21-year maturity range and an overall slope of 49 bps.  However, slopes at the long-end of the municipal yield curve remain very flat with only 30 bps of slope from 21 to 30 years.  Due to this flat tail, municipal bond investors can currently buy 20-year maturities that yield over 90% of the 30-year curve versus less than 70% for 10-year maturities.

Due to the outperformance of munis, Municipal/Treasury ratios have generally declined over the past week.  Municipal bonds have continued to price at richer levels as ratios fall well below several important reference points along the curve.  Ratios for 10-year municipal yields are now under 70% of Treasuries, 20-year ratios are below 80% and 30-year ratios are below 90% of Treasuries.  For investors seeking to maximize curve positioning with relative value, the 19 to 21-year part of the municipal yield curve is attractive with slopes of 11 to 13-bps per year and yields around 80% of Treasuries.  Although ratios past 20-years are more attractive, relative to Treasuries, the yield curve is very flat over these longer tenors.

Herbert J. Sims & Co. Inc. is a SEC registered broker-dealer, a member of FINRA, SIPC. The information contained herein has been prepared based upon publicly available sources believed to be reliable; however, HJ Sims does not warrant its completeness or accuracy and no independent verification has been made as to its accuracy or completeness. The information contained has been prepared and is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading or investment strategy, and is subject to change without notice. All investments include risks. Nothing in this message or report constitutes or should be construed to be accounting, tax, investment or legal advice.