Municipal Bonds: Relative Value Versus Absolute Yield

The video discusses the municipal bond market's reaction to potential Federal Reserve decisions, highlighting that such days are typically non-events. It explores the relative value of munis compared to treasuries, emphasizing the 10 to 12-year sector for value. The discussion also covers absolute yields, noting low returns and a shift from exempt to taxable markets due to lower absolute rates, with a significant increase in taxable issuance.

What is the expected impact of the Fed's decision on the muni market on a typical Fed Day?

• A decrease in bond prices

• A non-event

• A significant market shift

• A major increase in rates

In the context of munis, what does a higher ratio of AAA munis to treasuries indicate?

• The munis are more expensive

• The munis are cheaper

• The munis have lower credit risk

• The munis have higher yields

Which sector is considered to offer the best value in the muni market?

• 5 to 7 years

• 10 to 12 years

• 15 to 20 years

• 1 to 3 years

What is the expected trend for total returns in the muni market going forward?

• Significant price appreciation

• Moderate price appreciation

• Limited price appreciation

• Price depreciation

What has been the trend in taxable issuance for munis recently?

• Issuance levels have remained unchanged

• A significant increase in issuance

• Stable issuance levels

• A decrease in issuance