JPMorgan warns of muni market pressures as yields hit highest since April 2025

Municipal bond yields just hit 3.62% for top-bracket investors, a level not seen since April 2025. For anyone doing the mental math on tax-equivalent returns, that works out to roughly 6.1%, which is the kind of number that tends to make income-focused investors sit up a little straighter in their chairs. JPMorgan flagged the move in a recent report, attributing the yield spike to a familiar trio of pressures: a selloff in US Treasuries dragging muni prices lower, a flood of new bond issuance hitting the market, and demand that hasn’t quite kept pace with supply. The numbers behind the pressure Despite the yield volatility, money is still flowing into municipal bond funds at a remarkable clip. JPMorgan’s data shows $46 billion in year-to-date inflows into muni funds as of early June 2026, the second-highest pace ever recorded. The muni market has actually performed reasonably well on a total return basis. Year-to-date returns stand at 1.74%, which has outperformed both corporate bonds and Treasuries over the same stretch. On the supply side, the numbers tell a story of relentless issuance. Municipal bonds issued in 2025 exceeded $585 billion, and forecasts for 2026 project around $...