While our outlook for the municipal bond market in 2026 is positive overall, we have identified five risks that we believe should be on investors' radar.

We expect another generally good year for bond returns this year, but even the best-laid plans can go awry when circumstances change. Here are four risks to our outlook.

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Our 2026 outlook shows fixed income continuing to benefit from elevated rates, while equities still face a narrowing edge over risk-free investments.

Investors are navigating not just uncertainty, but an unstable environment influenced by tariffs and inflation, among other factors. While volatility may increase, there is likely room for another solid year in 2026, especially for fixed income and international stocks.

As we approach 2026, what can investors expect from the equities market, fixed income, and the overall US economy in the new year?

We continue to suggest an up-in-quality fixed income bias for the short run, but investors can still consider some of the riskier parts of the fixed income market in moderation.

We believe municipal bonds will continue to offer attractive tax-adjusted yields in 2026, while credit quality should remain stable.