Consider Munis for Tax-Free Income

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Consider Munis for Tax-Free Income

Sep 22, 2025

In 2024, the municipal bond market saw record trading for the third consecutive year. New issues also set a record at $508 billion, the first time muni issues exceeded $500 billion. The trend continued through the first quarter of 2025, with trades and new issues both higher than the first quarter of 2024.

This increased activity was primarily driven by individual investors attracted to higher yields that coincided with the Federal Reserve raising interest rates to combat inflation.2 Although the Fed has begun to lower rates, they may remain relatively elevated for some time, which could continue to support solid bond yields. Moreover, bonds purchased in a higher rate environment will typically increase in value on the secondary market as interest rates decline. Like other bonds, munis can help steady a portfolio during times of stock market turbulence and provide income regardless of market trends.

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