Summary
– The 2025 municipal bond market faces fiscal stress amid surging tax-exempt issuance and a steepening yield curve, mirroring historical dislocations like the 2008 crisis.
– Policy uncertainty from U.S. trade volatility and potential tax reforms disproportionately impacts healthcare, education, and infrastructure sectors with exposed credit fundamentals.
– Investors balance long-dated bond opportunities (3.37%-5.81% yields) with active management, prioritizing strong liquidity buffers and diversified revenue streams to hedge policy-driven risks.
– Despite record-low 2025 defaults (26 year-to-date), credit divergence widens, requiring disciplined selection of high-quality bonds with 15+ year maturities and stable toll-backed infrastructure projects.
ainvest.com
by Marcus Lee
Tuesday, Sep 9, 2025 3:37 am ET