High-Yield Munis Outperform as Credit Spreads Narrow

Chris Grantee, head of municipal trading, discusses why the Muni yield curve may not invert like the Treasury yield curve, citing historical trends and credit components. He highlights opportunities in the credit market, suggesting risk management strategies. Concerns about a liquidity crisis in the muni market are raised due to reduced dealer liquidity and increased buy-side participation. The discussion also covers the advantages of the taxable market over the tax-exempt market due to increased supply. Finally, Chris explains his preference for revenue bonds over general obligation bonds, citing cash flow visibility and pension obligation issues.

What are the concerns regarding the balance sheets within the dealer space in the municipal market?

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Why does the speaker prefer revenue bonds over general obligation bonds?

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