TAXF News and Press, American Century Diversified Municipal Bond From 09/27/22

Summary Historic levels of volatility in the municipal (muni) bond market so far this year has caused investor concerns over market conditions. Technical conditions in the market have improved for tax-exempt investors as the year has progressed, yet outflows of funds from the sect...

Summary Transparency and competition in the municipal market have largely improved with advances in regulation, electronic platforms and algorithms. The surge in trading volume year-to-date, however, also reflects a pronounced rise in swapping activity, which has distorted typical...

Summary Rising interest rates severely pressured fixed income assets in August. Municipals slightly outperformed U.S. Treasuries amid supportive supply-and-demand dynamics. A more defensive stance is warranted as seasonal trends typically turn less favorable in September. ...

Muni debt is mostly owned by tax-paying Americans, and their preferences determine the market prices of the debt. Trillions in derivatives are tied to Treasury debt structures and are part of global transactions that ignore the yield curve outlook and trade against the Treasury yield ...

Now, most recently, the Russian war with Ukraine and its shock to energy and commodity markets, at a time when inflation was already running hot, has added greatly to investor concerns. While retirement planners and long-term liability managers often need to take on duration to hedge ...

Inventories have risen recently and there has been a lot of commentary about how this will negatively impact the economy. My brief overview of markets is that large growth stocks are still overvalued even as they led the recent rally. The sentiment about the economy is still quite...

At the end of April, Moody’s Investors Service released its annual municipal bond market snapshot, US municipal bond defaults, and recoveries, 1970-2021, with updates through 2021. Even though the average five-year municipal default rate since 2012 has been 0.1%, compared to 0....

This has been a historical year in fixed income, and municipals are no exception. Yields rose dramatically this year in anticipation of Fed moves, as the market is trying to get ahead of the Fed as the Fed is trying to tame inflation. The largest reason being outflows in the municipal...

This quarter we discuss implications for munis from investment-market declines, inflation, and a potential recession. A recession that necessitates cost cutting could see muni managers choosing between social programs or annual payments into a pension fund and raising taxes and other ...

As we enter the second half of 2022, predictions of a possible recession range widely as the key drivers of inflation shift from goods to commodities and services, notably housing. For bond investors, the sharp rise in the rate landscape has had an outsize impact across the board, wit...