CMF - Q2 2024 Total Return Municipal Review - 'Two Tales In A Quarter'

2024-06-30 13:20:00 ET

Summary

• The first part of the quarter saw a continual rise in overall yields that started at the beginning of the year.
• Towards the end of April we started to get some more bond-friendly data.
• What are we doing and why are we doing it?

By John R. Mousseau, CFA

The bond market in the second quarter was really two stories. The first part of the quarter saw a continual rise in overall yields that started at the beginning of the year. In other words, a reversion of the bond market rally that was the hallmark of the fourth quarter last year. The ten-year US Treasury ( US10Y ) rose from 3.88% at the start of the year to hit 4.70% on April 25 ^th . What were the causes? More fear of the Fed – “higher for longer” – and this was buttressed by some strong job numbers early in the year, continuing low jobless claims, and some upward surprises on the monthly inflation front. All of these conspired to have investors move their expectations out longer for the Fed to cut short-term interest rates....

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