--- title: Market Commentary - October 2026 description: September was a brutal month for fixed income markets, particularly the municipal bond market. Yield movement was the most severe ever for 5 and 10-year rates and among the worst for longer tenors. For investors with a long-term investment horizon, an attractive entry point has been established. image: https://blog.lindcapitalpartners.com/hubfs/October%202026%20Image.png --- [![Lind Capital Partners](https://blog.lindcapitalpartners.com/hs-fs/hubfs/raw_assets/public/cleopatra/images/lind-capital-partners-logo.png?width=180&height=60&name=lind-capital-partners-logo.png)](https://lindcapitalpartners.com) - [About](https://lindcapitalpartners.com/about/) Show submenu for About - [Overview](https://lindcapitalpartners.com/about/) - [Philosophy](https://lindcapitalpartners.com/about/philosophy/) - [Who We Serve](https://lindcapitalpartners.com/about/who-we-serve/) - [Team](https://lindcapitalpartners.com/about/team/) - [Investment Strategy](https://lindcapitalpartners.com/investment-strategy/) - [Insights](https://blog.lindcapitalpartners.com/) Show submenu for Insights - [Market Insights](https://blog.lindcapitalpartners.com/) - [Archived Commentary](https://lindcapitalpartners.com/archived-commentary/) - [Resources](https://lindcapitalpartners.com/resources/) - [Contact](https://lindcapitalpartners.com/contact/) - [LCPMX](https://www.lcpmx.com/) - [About](https://lindcapitalpartners.com/about/) Show submenu for About - [Overview](https://lindcapitalpartners.com/about/) - [Philosophy](https://lindcapitalpartners.com/about/philosophy/) - [Who We Serve](https://lindcapitalpartners.com/about/who-we-serve/) - [Team](https://lindcapitalpartners.com/about/team/) - [Investment Strategy](https://lindcapitalpartners.com/investment-strategy/) - [Insights](https://blog.lindcapitalpartners.com/) Show submenu for Insights - [Market Insights](https://blog.lindcapitalpartners.com/) - [Archived Commentary](https://lindcapitalpartners.com/archived-commentary/) - [Resources](https://lindcapitalpartners.com/resources/) - [Contact](https://lindcapitalpartners.com/contact/) - [LCPMX](https://www.lcpmx.com/) Menu Menu # Market Commentary - October 2026 - [ABOUT](https://lindcapitalpartners.com/about/) - [Overview](https://lindcapitalpartners.com/about/) - [Who We Serve](https://lindcapitalpartners.com/about/who-we-serve) - [Philosophy](https://lindcapitalpartners.com/about/philosophy/) - [Team](https://lindcapitalpartners.com/about/team/) - [INVESTMENT STRATEGY](https://lindcapitalpartners.com/investment-strategies/) - [THOUGHT LEADERSHIP](https://lindcapitalpartners.com/thought-leadership/) - [INSIGHTS](https://blog.lindcapitalpartners.com) - [Market Insights](https://blog.lindcapitalpartners.com) - [Archived Commentary](https://lindcapitalpartners.com/archived-commentary/) - [Resources](https://lindcapitalpartners.com/resources/) - [CONTACT](https://lindcapitalpartners.com/contact) - [LCPMX](https://www.lcpmx.com/) # Market Commentary - October 2026 Oct 1, 2026 September was a brutal month for fixed income markets, particularly the municipal bond market. Yield movement was the most severe ever for 5 and 10-year rates and among the worst for longer tenors. For investors with a long-term investment horizon, an attractive entry point has been established. ![https://44903514.fs1.hubspotusercontent-na1.net/hubfs/44903514/October%202026%20Image.png](https://blog.lindcapitalpartners.com/hubfs/October%202026%20Image.png) Lind Capital Partners Municipal Market Commentary ![Screenshot 2026-09-30 at 17.43.17](https://blog.lindcapitalpartners.com/hs-fs/hubfs/Screenshot%202026-09-30%20at%2017.43.17.png?width=960&height=264&name=Screenshot%202026-09-30%20at%2017.43.17.png) Municipal Market Performance and Benchmark Rates:  September was an extraordinarily difficult month for fixed-income investors. Five- and ten-year AAA municipal yields rose 91 and 83 basis points, respectively—the largest monthly increases in our data going back to **2011**. Thirty-year AAA municipal yields rose 65 basis points, the third-largest monthly increase over that period. Municipals also significantly underperformed Treasuries. While the 10-year Treasury yield increased 49 basis points during September, the 10-year AAA municipal yield increased 83 basis points. In other words, the month's decline wasn't simply the result of higher interest rates; municipal valuations became substantially more attractive relative to Treasuries, as well. Finally, it should not be a surprise that performance was abysmal. The IG Index (LMBITR) experienced the worst monthly performance (5.02%) since 1987. The HY Index (LMHYTR) fell by (5.01%). While HY continues to outperform IG, neither has had a good year, yet. Mutual Fund Flows:   Investment-grade mutual fund flows briefly turned negative in September, while high-yield fund flows were negative for the month. Interestingly, reported inflows were largely directed to ETFs rather than traditional mutual funds. In our view, this activity likely reflects increased participation from crossover investors seeking to take advantage of the significant market dislocation and substantially cheaper municipal valuations. Primary Market Supply:   Municipal new-issue supply accelerated further in September, with issuance of approximately $56B—the largest September in our data going back to 2010 and roughly 27% above last September. Year-to-date issuance now approaches $468B, approximately 9% ahead of last year's record-setting pace. At the same time, dealers are reporting record secondary-market bid-wanted activity, adding another source of supply pressure. This activity is closely related to fund flows, as portfolio managers frequently use bid-wanteds to raise liquidity in response to investor redemptions. The combination of historically heavy supply, seasonal weakness in investor demand and a broad fixed-income sell-off contributed to September's unusually severe market dislocation. ## Lind Capital Partners Municipal Non-Rated Market Commentary **Sorting through the rubble to find the opportunity…** As noted above, September produced a sharp bond market sell-off with meaningful mark-to-market price declines. Rates moved materially higher and liquidity deteriorated significantly. We regularly highlight many of the seasonal idiosyncrasies of the Non-Rated Municipal Market, including periods of heightened supply combined with diminished investor demand. While we anticipated this seasonal environment to begin in September, we did not expect it to coincide with a significant sell-off across nearly all fixed-income asset classes. At Lind Capital, we are less interested in trying to predict where the 10-year Treasury will be trading next month than in asking a much more fundamental question: **“*What are we being paid to take on the credit risk of a borrower?*”** The answer today is **considerably more** than we were being paid last month—or at almost any other point in our 16-year history. While higher yields mean lower bond prices, they also create better prospective returns. For investors with a long-term investment horizon, today’s yields offer a substantially more attractive return profile than existed before the sell-off, with little to no change in the underlying credit risk. **Generally, we believe investors should consider starting yield a useful guide to prospective long-term returns. A new portfolio constructed today at tax-exempt yields of 7.00%–7.50% (greater than 12% taxable equivalent for investors in the maximum federal tax bracket) offers a compelling prospective long-term return profile, assuming underlying credit performance. Incorporating some expectation for credit volatility still presents a compelling risk-versus-return trade-off, in our opinion.** For existing investors, short-term price declines can certainly be uncomfortable, but higher market yields can improve the prospective return profile if long-term discipline is maintained. Existing portfolios can reinvest coupons and maturities or contribute additional capital that can be deployed into today’s more attractively priced opportunity set. Investors should also consider their risk exposure across asset classes and ask the same fundamental question: “***What am I being paid to take on that risk?***” The historically high yields now available in fixed income also give investors an opportunity to re-evaluate the risks they are taking elsewhere in their portfolios—and ask whether they are being adequately paid to take them. In addition to more attractive yields, the sell-off has also broadened our investment universe. After eight months of very limited secondary market activity, the sell-off has started to drive investor outflows from high-yield municipal funds. As funds are forced to liquidate positions, we are seeing significantly more opportunities to make secondary market purchases in approved credits. This allows us to deploy capital more efficiently. There are also many issues that have received our credit team’s approval but, until recently, did not offer a high enough yield to adequately compensate investors for the credit risk. Higher yields have significantly expanded the number of investment opportunities within our target universe. We do not try to predict where rates go from here—we do not need to. We focus instead on building long-term investment portfolios that generate high levels of tax-exempt income by exploiting inefficiencies in the Non-Rated Municipal Bond Market. Today, we are being paid considerably more to take credit risks we understand, and our opportunity set is considerably broader. ![Screenshot 2026-09-30 at 17.48.41](https://blog.lindcapitalpartners.com/hs-fs/hubfs/Screenshot%202026-09-30%20at%2017.48.41.png?width=1037&height=422&name=Screenshot%202026-09-30%20at%2017.48.41.png)The chart above shows the increase in value of $1,000,000 invested in the LCP composite at inception (net of management fees and expenses) vs. the benchmark, the Bloomberg High Yield Muni (LMHYTR) as well as the Bloomberg Muni (LMBITR) indices (it is not possible to invest in either Bloomberg Index). Please contact us with questions regarding credit profile, returns, taxable equivalent yields or further portfolio information. Past performance is not indicative of future results. ## Lind Capital Partners Municipal Market Charts ![Screenshot 2026-09-30 at 17.50.51](https://blog.lindcapitalpartners.com/hs-fs/hubfs/Screenshot%202026-09-30%20at%2017.50.51.png?width=960&height=1110&name=Screenshot%202026-09-30%20at%2017.50.51.png)   Disclosure --- Past performance is not indicative of future results. An investment in the Lind Capital Partners Non-Rated Municipal strategy is not suitable for all investors. Investing involves risk, and municipal instruments can be affected by adverse political and economic conditions. The material contained herein is provided for informational purposes only and is not financial advice, should not be construed as an offer to buy, hold, or sell any security or to invest in the strategy, and may contain information from third party sources Lind Capital Partners, LLC (LCP) believes to be accurate.Any offer for investment in the LCP limited partnership vehicle will be made exclusively to qualified investors on a private placement basis, and only by means of a private placement memorandum, which contains detailed information concerning investment terms. LCP is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration as an investment advisor does not imply a certain level of skill or training. Performance information (time-weighted rate of return) is provided for the LCP Non-Rated Municipal Composite (Inception May 1, 2010)which is comprised of all fully discretionary accounts managed in the LCP High Yield Muni Strategy. Performance returns include realized and unrealized gains and losses; are calculated total return, net of actual advisory fees and transaction costs, including distributions to Limited Partnership investors where appropriate. Refer to LCP’s Form ADV Part 2A for additional information related to advisory fees and services. This document is publicly available and upon request by contacting: Info@LindCaptialPartners.com. Performance measured by Cortland Capital Services,Clearwater Analytics, NAV Consulting, ICE Data Services and Bloomberg. Opinions expressed are those of LCP and should not be considered a forecast of future events or a guarantee of future results. Opinions and estimates offered constitute our judgment as of the date set forth above and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. All material presented is compiled from sources believed to be reliable, but no guarantee is given as to its accuracy. Taxable equivalent yield = (Tax-ExemptYield)/(1-Federal Tax Rate). ### Lind Capital Partners Lind Capital Partners combines deep expertise, rigorous credit analysis, and a high-conviction approach to deliver a unique approach to the non-rated municipal bond market. ### Contact Us Lind Capital Partners 500 Davis Center, Suite 1004 Evanston, Illinois 60201 312.878.3830 Lind Capital Partners. LLC (LCP) is registered with the Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. The SEC has not approved or disapproved the content of this website nor determined whether this website is accurate or complete. The information on this website is intended for US residents only. The information provided does not constitute an offer to buy or sell securities in any jurisdiction. [Form ADV Part 2A](https://lindcapitalpartners.com/disclosures/Lind-Capital-Partners-2025-ADV-Part-2.pdf) · [Form CRS - Client Relationship Summary](https://lindcapitalpartners.com/disclosures/LCPCRS2023.pdf) © 2025 Lind Capital Partners. All Rights Reserved. ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Lind Capital Partners", "url" : "https://blog.lindcapitalpartners.com/author/lind-capital-partners" }, "dateModified" : "2026-10-01T05:59:59.683Z", "datePublished" : "2026-10-01T05:59:59.000Z", "headline" : "Market Commentary - October 2026", "image" : [ "https://blog.lindcapitalpartners.com/hubfs/October%202026%20Image.png" ], "mainEntityOfPage" : { "@id" : "https://blog.lindcapitalpartners.com/market-commentary-october-2026", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.lindcapitalpartners.com/hubfs/lind-capital-partners-logo.png" } } } ```