FMNY - Patience Remains A Virtue For Municipal Investors

2024-05-08 10:20:00 ET

Summary

• Municipal bonds posted negative total returns but outperformed comparable Treasuries in April.
• The large and diverse new issue slate was well absorbed at higher nominal yields.
• The large and diverse new issue slate was well absorbed at higher nominal yields.

By Patrick Haskell, James Schwartz, & Sean Carney

Market overview

Municipal bonds posted negative performance in April. Interest rates rose and pressured fixed income assets as stronger-than-expected employment and inflation data prompted a more hawkish tone from the Federal Reserve, further reducing expectations for monetary policy easing in 2024. Municipals displayed their more defensive nature and outperformed comparable Treasuries. The S&P Municipal Bond Index returned -1.07%, bringing the year-to-date total return to -1.16%. Shorter-duration bonds and the high yield sector performed best....

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