Overview
– Trump-era policies reshaped municipal bond markets and local governance spending through deregulation, tax reforms, and funding cuts.
– The 2017 TCJA increased borrowing costs by $824B over a decade by eliminating tax exemptions for advance refunding bonds and threatening PABs.
– Medicaid and education funding cuts, plus climate risks, exposed fiscal vulnerabilities in states like Kansas and Washington, D.C., triggering credit downgrades.
– Deregulation and policy uncertainty heightened political risks, forcing investors to prioritize diversification and hedging against credit stress.
ainvest.com
by Cyrus Cole
Saturday, Aug 23, 2025 3:14 am ET