‘We haven’t seen yield like this in a really long time,” Goldman Sachs’ Sylvia Yeh says of the municipal bond market.
As Goldman Sachs has hiked its probability of a U.S. recession to 45%, the investment bank recommends a shift in client portfolios towards high-quality fixed income, citing resilience in the asset class amid broader stock market volatility.
“If we’re going into an economic downturn, higher credit quality and longer duration would benefit in a scenario like that,” said Sylvia Yeh, co-head of municipal fixed income at Goldman Sachs. “Whether it’s munis [municipal bonds] or investment grade corporate bonds or others, I think you would actually see money move into those markets and the different vehicles because of recession fears.”
S&P Global’s Municipal Bond Index is down 0.87% so far this year, while Bloomberg’s index for 10-year AAA municipal bonds has seen its yield rise to 3.26% in Q1 of this year.
investmentnews.com
By Andrew Cohen
MAY 05, 2025