In a nutshell, munis held up better than most intermediate duration bonds last week. But the author is cautious.
“Municipal bonds … held up remarkably well as demand for tax-exempt securities swelled earlier this year. That’s because retail investors have piled into munis, adding nearly $25 billion of net new funds to national municipal mutual funds through April, according to the Investment Company Institute, a trade group of mutual fund companies. Meanwhile, new municipal bond supply has run consistently below average for most of the year. The reinvestment of income from maturities, calls and coupons outstripped municipal bond new issuance by nearly $16 billion in January alone, according to a Wall Street Journal report.”(An excerpt from this piece appears in the current issue of
Barron’s)
https://cressetcapital.com/post/munis-vulnerable-to-fed-policy-shift/
