TOOLS
Login to access your documents and resources.
Fixed income
Taxable municipal bonds: silver linings
Listen to this insight
~ 3 minutes long
10
10
The fallout from the U.S. administration’s tariff regime continues to send shockwaves through markets. Uncertainty around policy will likely continue to drive market and geopolitical volatility, and has complicated the U.S. Federal Reserve (Fed) rate cutting path. While uncertainty and volatility impact several asset classes, we see opportunities in taxable municipal bonds to play an important role in diversified portfolios.
Key takeaways for Q2 2025
- Taxable municipal bond credit profile strength helped outperform most fixed income indices during the first quarter.
- Credit spreads widened throughout the quarter and gained further momentum in March as tariff related volatility raised concerns of a slowing economy.
- Municipal credit should remain resilient in a slowing economy and outperform corporates, bolstered by fundamental strength and a favorable technical environment.
Related articles
Temporary market weakness early in Q2 could reverse quickly, providing opportunities to capture yield.
The impact of shifting tariff policies on municipal credit will vary greatly by sector and region.
Nuveen makes the case why U.S. municipal bonds can be considered social bonds.
The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Performance data shown represents past performance and does not predict or guarantee future results. Investing involves risk; principal loss is possible.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. For term definitions and index descriptions, please access the glossary on nuveen.com. Please note, it is not possible to invest directly in an index.
Important information on risk
Investing involves risk; principal loss is possible. All investments carry a certain degree of risk and there is no assurance that an investment will provide positive performance over any period of time. Investing in municipal bonds involves risks such as interest rate risk, credit risk and market risk. The value of the portfolio will fluctuate based on the value of the underlying securities. There are special risks associated with investments in high yield bonds, hedging activities and the potential use of leverage. Portfolios that include lower rated municipal bonds, commonly referred to as “high yield” or “junk” bonds, which are considered to be speculative, the credit and investment risk is heightened for the portfolio. Bond insurance guarantees only the payment of principal and interest on the bond when due, and not the value of the bonds themselves, which will fluctuate with the bond market and the financial success of the issuer and the insurer. No representation is made as to an insurer’s ability to meet their commitments. This information should not replace an investor’s consultation with a financial professional regarding their tax situation.
This information does not constitute investment research as defined under MiFID.
