Our tap water is filled with iron. It’s a very hard water. Luckily, not too hard for bread making. Although, there are times I use the water from the cooler we have (the tap water flavor is all over the place), I am pretty happy using the tap water if need be.
Minerals in water can affect your yeast. They can also affect your gluten formation.
Gluten is a serious concern for some, both positively and negatively. For my sake, I want it! And with water that is too hard, that might not happen.
It is also important to make sure you aren’t using completely soft water, with nothing in it. Distilled water won’t make good bread. You need a few minerals to get things moving.
Some folks with municipal water will find the chlorine poor for yeast development. In this case, you only need to let the water sit a while. The chlorine will go away. You can also heat it up or pour it back and forth between two cups. This will all help.
Water is the least considered of the four bread areas, in my opinion. It’s tricky to weigh, tricky to make sure it is just right.
However, there’s a lot about water you can ignore, too.
Room temperature water is typically just fine to use. Cold water is, too, but not as good. Water that is too hot will kill your yeast, but warm tap water is usually fine. Of course, hot tap water may have even more weird minerals in it – hot water is quite the solvent.
A dough with more water – 75% or more -will act weird. It will usually be easier for a crust to form in a dutch oven process, since there will be more steam. The oven spring will be a bit more aggressive. Too much oven spring (the dough expanding as it cooks) can cause a dense loaf. The loaf will eventually shrink.
This is why I try for about 60-70% hydration in most of my loaves.