He favors paper backed by gates at high-traffic sites such as LaGuardia Airport in New York and Los Angeles International Airport. Oops! If, on the other hand, they were to move in exactly opposite direction they would have a negative correlation of minus 1. The selling intensified in the middle of the month, as leveraged muni mutual funds were forced to unload bonds. Municipal Bonds in Today's Market. In a widely expected move, Federal Open Market Committee (FOMC) members voted to hold interest... We are providing certain data supplied to us by the Municipal Securities Rulemaking Board ("the Service") without warranties or representations and on an "as-is" basis. The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Income from municipal bonds held by the Fund could be declared taxable because of unfavorable changes in tax law, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. Muni Bonds vs BAB Bonds in Your Portfolio. Muni yields are currently almost double those on Treasuries, a rare occurrence. Now some market experts are predicting that long-term rates in the U.S. will continue to decline, potentially even to zero. Markets are highly volatile. Get too far into debt, or create other conditions that capital markets dislike, and the jurisdiction will face higher borrowing costs or being closed out entirely from credit markets, as happened with New York City’s fiscal crisis or Detroit’s recent bankruptcy. The MSRB, its officers, directors, employees, agents, consultants, and licensors make, and have made, no recommendations regarding any of the securities or other investment vehicles, referred to or described in the Service. (NHMAX), paying over 5%. Source: U.S. Department of the Treasury as of 9/12/2019. Join other Financial Advisors receiving FREE personalized market updates and research. Clearly…, This month saw more of news about financial market volatility. I’ve served as Executive Director of the Congressional Joint Economic Committee, Assistant Secretary of Labor for Policy, Deputy Commissioner for Policy and Research at New York State’s Department of Economic Development, and New York City Deputy Comptroller for Policy and Management. Alabama Alaska Arizona Arkansas California Colorado Connecticut D.C. Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. To confirm this, we looked at rolling municipal index returns over the same 10-year period, measuring the returns for Investment Grade, High Yield, Taxable, Short-Term, and Insured municipal bonds (Figure 2). ... News Municipal Bond Market Update - October Edition. The Service is reproduced by permission of the MSRB under a non-exclusive license. Correlation matrices present in a table format whether or not “different” investments will move at the same time for the same reason and in the same direction. U.S. He notes that discounts have moved out to an average of 10% recently, from 4% earlier this year.