NUO - NUO: Why I'm More Cautious On This Closed-End Muni Fund

Introduction

I first wrote about Nuveen Ohio Quality Municipal Income Fund (NUO) in June 2019 in the article "Leveraged Municipal Bond Funds - Expect Dividend Growth". At that time, my thesis was that the yield curve would begin to steepen as the Fed started cutting short-term rates. This would decrease the cost of leverage for the fund and enable distributions to increase. In that article, I showed that NUO's monthly distribution amount was well-correlated with the 2-20 year US Treasury spread.

Since then, the fund did raise its distribution as I predicted, from

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