Dan Close, Head of Municipals for Nuveen, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss the factors driving resilience in municipal markets and how municipalities are funding long-term infrastructure projects.
Close points to three key drivers behind strong demand in the municipal market: attractive starting yields, record fund flows, and solid fundamentals. Following municipal underperformance in 2025, he notes that the market has attracted approximately $40 billion in year-to-date fund flows, while state and local tax revenues continue to grow by about 5.5% year over year. Combined with strong investor demand, Close explains that he’s seeing deals now oversubscribed by eight to ten times. He notes that significantly higher construction costs, driven by rising labor and material expenses, are fueling elevated municipal issuance in 2026.
Among the strongest-performing sectors, Close highlights gas prepay bonds, water, and sewer projects, while noting that higher education and airport issuance has slowed. He also points to the FIFA World Cup as an example of how host cities are using the municipal market to bridge the gap between the high costs of hosting and available federal funding while investing in lasting infrastructure improvements. With 11 host cities financing projects through the municipal market, communities are investing in infrastructure that will benefit residents and local economies long after the World Cup winner is named, including a new MBTA transit station in Boston and Seattle’s light rail expansion.
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Home field advantage: Muni Bonds power America’s World Cup cities