CNBC reports that the upcoming 2026 U.S. midterm elections on Tuesday could impact the municipal bond market through state tax measures, new bond supply, and the composition of Congress. At the state level, California may raise taxes on the wealthy, while Florida might increase property tax exemptions. These changes would affect the tax-exempt appeal of municipal bonds. Additionally, some state and local governments may approve issuing more debt, increasing market supply. Analysts note that higher taxes would make the tax-exempt advantage of municipal bonds more valuable, potentially driving up bond prices; however, increased new bond supply would also require strong demand to be absorbed. As of September, year-to-date municipal bond issuance has reached $473.8 billion, a 7.8% increase year-over-year.