Municipal bonds now offer notably higher yields than corporate bonds on a taxable-equivalent basis.
That gap has widened sharply over the past two months, drawing attention from income-focused investors.
Tax-free muni bond yields are currently in a favorable position relative to their taxable counterparts.
The shift matters for investors in higher tax brackets, who benefit most from tax-exempt income.
Comparing yields fairly requires adjusting for taxes, a step that reveals the muni advantage.
Corporations issue taxable bonds, while municipalities issue debt free from federal taxes in most cases.
The widening spread suggests munis may be undervalued compared with corporate debt.
Investors weighing fixed-income options may find current muni yields attractive for long-term portfolios.
Market conditions can change quickly, and yield advantages often narrow once more buyers enter.
Those considering the move should review their tax situation and investment goals first.
