BlackRock Inc. says the municipal-bond market’s rip-roaring rally is probably unsustainable.
US state and local debt posted a historic return of more than 6% in November and another 0.7% already in the first part of December. Those types of gains are very unusual for the traditionally staid muni market where investors are accustomed to monthly returns less than 1%.
After the rally that began in November, US state and local debt has gotten expensive compared to US Treasuries. BlackRock’s muni team said in a note that the “trajectory of the rally is likely unsustainable” and noted the high valuations.
Bloomberg Markets
By Amanda Albright
December 11, 2023