Western Asset Management

On August 19, the US Treasury announced that it will at least double the size of its long-term bond buybacks, from $2 billion to $4 billion per operation, between September 9 and the November Quarterly Refunding. The announcement followed a rise in the 30-year Treasury yield to roughly 5.3% and is drawing attention to how the Treasury may respond if pressure at the long end persists.

In 3Q26, global fixed-income markets continue to navigate a complex backdrop as resilient growth, elevated inflation, hawkish central-bank pricing and the AI infrastructure buildout intersect. Growth remains supported by the US consumer, fiscal spending in Europe and AI-related capital investment, while inflation is expected to moderate through 2026 and into 2027.

Municipals posted their weakest July return in more than two decades. The Bloomberg Municipal Bond Index returned -1.85%, underperforming most investment-grade fixed-income sectors and marking just the fifth negative July return over the past 30 years.

Reserve managers' decisions on EM debt go beyond investment potential—they must also weigh considerations such as governance, resources and liquidity.

In this second quarter update, Western Asset believes global fixed-income markets face a more complex backdrop as geopolitics, rapid AI adoption and private credit scrutiny intersect.

A quarterly report providing an in-depth analysis of the global economic landscape, key drivers and insights into fixed-income markets for investors.

Fixed-income market sentiment was dominated by geopolitical headlines, particularly the conflict in the Middle East following disruptions to the Strait of Hormuz and rising oil prices, which contributed to renewed inflation concerns.

In February, market sentiment was shaped by escalating US-Iran geopolitical tensions and sector-specific selloffs driven by concerns about AI’s potential disruption to existing business models.

This month’s Muni Monthly covers performance, supply and demand technicals, fundamentals and valuations for the month ending October 2025.

Exploring sustainable investing complexities, this piece categorizes ESG into screening, integration, thematic investing, stewardship, and impact. Despite conflicting reports, ESG-labeled bond funds have thrived, reaching $900.5 billion in assets. Their premium indicates robust demand, countering decline narratives and underscoring continued vitality in fixed-income sustainable investing.

Sam Weitzman of Western Asset Management highlights the overlooked potential of municipal bonds as a high-quality asset class. With fixed income yields reaching near-decade highs and higher tax rates impacting taxable fixed income investing, municipal bonds are offering above-average after-tax returns and downside protection, making them attractive for income seekers.

Ken Leech, Chief Investment Officer at Western Asset takes a dive into his outlook for various segments of the fixed income markets in the second half of 2021.

Mark Lindbloom of Western Asset dives into the rise we have seen in inflation, whether it’s expected to be a persistent challenge or short lived, as well as why our environment is increasing the importance of risk mitigation and active management in fixed income.

Michael Bazdarich, Senior Economist at Western Asset, takes a deep dive into the July payroll jobs report and explains what the figures tell us about the future of our economy.

Rob Amodeo, Head of Municipals at Western Asset Management, digs into the state of the muni-bond market, his outlook moving forward and what investors have to look for to find winners in the sector.