FMNY - Munis Still Attractive
2024-02-07 03:18:00 ET
Summary
- The recent congressional continuing resolutions have slightly dampened the extremes, but most of the extraordinary spread is still in the marketplace.
- In my opinion, the benefit of higher interest rates flows to the buyer of a tax-free municipal bond even as it adds to the expenses of the municipality or issuer.
- Note that the housing agency bond has a prepayment methodology, so it can accelerate if the mortgages pay off faster than anticipated. All mortgage-related securities have that characteristic.
By now, readers are familiar with the chart structure below. It is used to compare an actual municipal bond, the federal agency yield curve, and the US Treasury yield curve....
Munis Still Attractive