How Fed's Inflation Fight May Impact State, Local Debt

The video discusses the implications of the Fed meeting minutes, highlighting the focus on inflation over recession. Christopher Gotti from Valley Bank explains the impact of inflation on municipal bonds, predicting higher interest rates. The supply-demand dynamics in the muni market are favorable, with limited supply and strong demand for tax-free income. The muni-treasury ratio is analyzed, showing current fair value. Credit quality in inflationary environments is a concern, especially for travel-related sectors. Strategies for managing budgets and preparing for potential recession are discussed. Finally, the video covers duration and credit concerns in municipal bonds, emphasizing the importance of understanding bond structures and cash flows.

In what ways can municipalities manage their budgets in anticipation of a potential recession?

What strategies can investors use to manage duration in municipal bonds?