- The NYC congestion toll pricing raised $215.7 million in the program’s first four months. Since January 5, most motorists have to pay $9 during peak hours to enter south of 60th Street in Manhattan. These collections are close to the budget estimates of $217 million for the period, and the fee is on track to bring in around $500 million this year. This is an important step in “shoring up” the MTA’s balance sheet as it addresses improvements to the aging system.
- Elite universities have taken on more than $4 billion in additional debt since March, which will help protect their finances as the Trump administration takes aim at their budgets. Most of this debt has been sold through taxable paper, Private loans, and commercial paper. We are skeptical about how this will play out, and remain cautious regarding higher education paper at this time.
- It is clear that the FED is in agreement regarding the patient approach to rate adjustments. With the economic uncertainty surrounding us at this time, most of the Fed members remain cautious about rate adjustments in the near future. We expect one or two moves this year, most likely starting in early winter.
- As we saw, a US Court has blocked many of President Trump’s tariffs on imports from dozens of countries, declaring them illegal and throwing the strategy into turmoil. The Trump administration has indicated that it will appeal the ruling, and it is unclear how quickly the decision will take effect. I suspect this will be overturned. The market rally today, May 29, on the news illustrates how sensitive and news-reactive investors continue to be at the moment.
- Shorter-dated MUNIs are performing well; bonds maturing under one year are performing the best of all MUNI segments, according to data compiled by Bloomberg. Investors appear to be seeking shorter-term MUNI bonds as a safe haven to ride out the volatility amid macroeconomic and political uncertainty. We would suspect this trend to last through the summer until we have clarity on tariffs.
- Federal Reserve Bank of Richmond President Tom Barkin indicated the elevated uncertainty has led businesses to freeze hiring and hold off on future investment decisions. With low unemployment and inflation moving towards the central bank’s goal of 2%, the “elephant” in the room is tariffs and how they will impact the overall markets.
- June through July should prove strong for MUNIs due to lower issuance and heavy redemptions. It is widely known that the Fed will most likely not move rates; however, factors such as the above and the 90-day pause on tariffs should provide opportunities.
- Treasury Secretary Scott Bessent said he anticipates that trade deals will be announced with other nations ahead of the expiration of the 90-day pause on the steep reciprocal rates the administration imposed on April 2. Bessent indicated, “Many of the Asian countries have come with excellent deals.”
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Yield to call (YTC) is not indicative of total return; this yield is valid only if the security is called. Bonds may or may not be called, or be callable on multiple dates or, in other cases, called any date following the first call date, so yield to call is based on the earliest stated call date. Discounted bonds may be subject to capital gains tax. Bonds may be subject to OID (Original Issue Discount). Prices and availability may change at anytime without notice.
Do not buy bonds based on the Yield to Call (YTC). Insured bonds are issued for timely payment of principal and interest only. Insured bonds do not cover potential market loss and are subject to the claims paying ability of the insurance company.
Non-rated (NR), With-Drawn (WR), or below investment grade bonds, lower rated bonds, carry a greater potential risk of default & should be considered by sophisticated investors only.
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