Overview
– Fed’s 2025 rate cuts signal shifting municipal bond dynamics, with supply/demand alignment creating strategic opportunities.
– 2025 issuance up 16% YoY as borrowers hedge rate volatility, while steep yield curves boost long-duration yields by 24bps.
– Tax-exempt municipals outperform corporates by 51bps, with SMA programs driving demand for 1-15 year high-quality bonds.
– Strategic opportunities include long-duration investment-grade bonds, high-yield short-duration positions, and flexible TOBs.
– Immediate action recommended as favorable yield curves and policy shifts narrow the window for tax-efficient income generation.
ainvest.com
by Victor Hale
Saturday, Aug 2, 2025 2:43 am ET