Summary

• Tax-exempt municipal bonds were essentially flat in the first quarter of 2026, as a late-period pullback erased early-year gains amid concerns that the Iran war could lead to stagflation – that is, economic stagnation with high inflation.
• Munis kicked off 2026 with a solid advance in January (+0.94%), lifted by powerful seasonal technical factors.
• Muni gains accelerated in February (+1.25%) amid still-favorable market technical factors and declining yields, which strengthened bond prices.

Investment Approach

• Fidelity® Intermediate Municipal Income Fund is a diversified national municipal bond strategy investing primarily in intermediate-maturity general obligation and revenue-backed securities.
• Our investment approach focuses on fundamental credit analysis, yield-curve positioning and an

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