BlackRock Sees Supply and Demand Driving Municipal Bond Rally

The video discusses the factors behind a long and robust market rally that began in November 2018. It highlights the supply-demand dynamics, the impact of tax reforms on gross issuance, and the role of inflows in sustaining the rally. The discussion also covers the Muni to Treasury ratio's relevance in a retail-driven market and the current market conditions with low yields and fewer protections for buyers. The importance of credit research in understanding high-yield deals is emphasized, drawing parallels to the 2007-2008 financial period.

What factors are contributing to the current rally in the market?

How has the removal of advance refunding bonds in tax reform affected gross issuance?

What trends have been observed in inflows into the market, and how do they compare to previous years?

What role do retail investors play in the current rally, and how does it affect the importance of ratios?

In what ways does the current market environment resemble that of 2007 and 2008?