BlackRock's Carney: Munis Might Lag If Treasuries Rally

The video discusses the recent performance of municipal bonds (munis) as a safe haven in the fixed income market, particularly in June. Sean Carney from BlackRock explains the factors contributing to this trend, including higher rates and strong demand. The discussion covers future expectations, considering seasonal factors and the Federal Reserve's tightening cycle. It also addresses fund flows, highlighting the need for rate stability to encourage steady inflows. Finally, the video explores investment strategies, emphasizing the importance of building durable yield in portfolios as the Fed's rate hiking cycle nears its end.

What factors contributed to the strong performance of municipal bonds in June?

• Decreasing interest rates

• Higher rates and a safe haven bid

• High supply and low demand

• Increased equity market focus

What is a potential concern for the continuation of gains in the muni market?

• High supply levels

• Decreasing demand

• Relative value concerns

• Stable economic conditions

What could help stabilize fund flows into the muni market?

• Decreased investor interest

• Higher inflation rates

• Increased rate volatility

• Confirmation of the last Fed rate hike

Why might risk-averse investors consider muni bonds over money market mutual funds?

• Lower returns on munis

• Increased rate volatility

• Higher risk associated with munis

• Durable yield and portfolio duration

What is a key strategy for building a portfolio with muni bonds?

• Focusing on short-term yields

• Avoiding any duration

• Building durable yield and adding duration

• Investing only in mutual funds