Municipals ended unchanged to slightly better Friday going into the July 4 holiday, but one analyst sees the potential for fireworks of a different sort ahead.

"It's kind of a witch's brew here of events that could create a great deal of market volatility," James Kochan, head of fixed income asset management at Robert W. Baird & Co., said. Kochan cited the Federal Open Market Committee meeting taking place today and tomorrow, out of which he sees a 60% likelihood for some form of monetary policy tightening.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.