Market Insights

Munis’ federal tax exemption is doing double duty this month, keeping borrowing costs manageable for issuers while handing investors some of the highest tax-adjusted yields in years.

On Wednesday, the Treasury Department said it would at least double the size of its liquidity support buyback operations for securities in the 10-year to 30-year sector, Secretary Scott Bessent’s latest attempt to rein in long-term borrowing costs from multi-year highs.

This week’s data leans one direction: cooling. Core CPI matched the slowest annual pace since March 2021 at 2.5%, and nonfarm payrolls fell by 23,000, with a net 103,000 jobs cut from May and June estimates.

NYC dodges a downgrade. Here’s what that means for your muni portfolio.

The Federal Reserve held rates steady this week, but the vote itself was the story. Three regional Fed presidents — Cleveland’s Beth Hammack, Minneapolis’s Neel Kashkari, and Dallas’s Lorie Logan — dissented in favor of a quarter-point hike.

Yields moved higher again this week. The 10-year Treasury touched 4.70% as we write this, and munis and corporates followed, pushing prices lower across the curve.

Investors placed more than $70 billion in orders for roughly $2.4 billion of tax-exempt bonds this week, one of the largest order books in municipal market history.

Fed Chairman Kevin Warsh’s break from forward guidance is looking less like a one-off posture and more like doctrine.

Municipal investors are entering the summer with their most favorable technical backdrop in months.

Something that seemed months away has now arrived: a formal ceasefire framework between the United States and Iran, and with it, a meaningful shift in the macro backdrop investors have been navigating since February.

May’s nonfarm payrolls came in at 172,000 — the strongest three-month advance in more than two years — and the unemployment rate held steady at 4.3%.

The municipal bond market ended May with something more valuable than a headline return: proof that demand is durable.