Muni Bonds Ride the Wave of the Treasury Market Rally

The video discusses the recent trends in the municipal bond market, highlighting the significant inflows driven by the Treasury rally and tax reform. It explains the impact of tax reform on demand and supply, noting the reduction in advanced refunding and the increase in taxable issuance. The video also explores value opportunities in the housing and AMT sectors, emphasizing the importance of income. Finally, it addresses the current credit cycle, suggesting a cautious approach due to increased high yield supply and less stringent covenants.

What has been a significant driver of the strong returns in the muni market this year?

• A rise in inflation

• Increased government spending

• The Treasury market rally

• A decrease in interest rates

How has tax reform affected the supply side of the muni market?

• It reduced investor demand

• It led to more infrastructure projects

• It eliminated advanced refunding

• It increased the supply of tax-exempt bonds

Which sector is currently seen as providing value in the muni market?

• Healthcare

• Technology

• Housing

• Retail

What is a key indicator that suggests we might be nearing the end of the current credit cycle?

• Increased government regulations

• Decreasing consumer confidence

• Rising interest rates

• Deals being oversubscribed and repriced lower

What is the impact of AMT exposure on investors in the current market?

• It limits their ability to invest in high-yield bonds

• It increases their tax liability

• It reduces their investment options

• It provides additional income opportunities