Overview
– 2025 municipal bond strategies shift as states cut pandemic aid reliance, boost pension/infrastructure spending, and issue $281B in new debt to offset tax cut impacts.
– Steepened yield curves (127bps over 10Y Treasuries) enable “rolling down the curve” tactics, while tax-exempt municipals outperform Treasuries amid $9.2T Treasury refinancing risks.
– $10B YTD inflows reflect investor preference for duration extension and active management, with taxable municipals matching corporate yields and offering geopolitical risk resilience.
– Strategic “barbell” approaches combining short/long-term bonds and sector-specific opportunities in healthcare/transportation highlight market inefficiencies and yield capture potential.
ainvest.com
by Nathaniel Stone
Monday, Sep 8, 2025 10:44 pm ET