EVN - Inflation? For Muni Investors The Right Strategy Is Key

• Municipal bond investors are clearly worried about rising rates and rising inflation.
• The inflation component is also taxed at ordinary income tax rates, but here's the kicker there: you don't receive the benefit of it the year that it's realized.
• As yields are rising - and inflation expectations are likely rising because there's a high correlation between the two - even though the bonds may be losing value, the swaps are gaining in value and that's where you get your offset.

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