- Supply boost, low interest rates weigh on market: Barclays
- ‘Who wants to be aggressive at current rates?’ analyst says
The best days for the municipal-bond market in 2019 are probably behind it.
A surprise boost in state and local government debt sales this month, low interest rates and investors’ desire to lock in the market’s biggest returns since 2014 suggest that tax-exempt bonds may lag Treasuries for the remainder of the year, according to Barclays Plc strategists led by Mikhail Foux.
With interest rates not far from a more than half century low, states and cities are seizing on the moment to borrow, creating headwinds for a market that had benefited from a slowdown in new debt sales since late 2017. States and local governments have sold $19 billion of fixed-rated bonds so far this month and plan to issue another $17 billion over the next 30 days, according to data compiled by Bloomberg.
Bloomberg Markets
By Martin Z Braun
September 10, 2019, 10:32 AM PDT