Timely takes on markets and the economy.
Market Commentary content
The bond market has become surprisingly quiet in the past few months. Ten-year Treasury yields have settled into a narrow range near 1.6%, after peaking at 1.74% on March 31st, a steep rise from less than 1% at the start of the year. The market has shrugged off wide swings in the economic data, a spike in inflation readings, and uncertainty about the direction of fiscal and monetary policies. It reminds us of one of the puzzles in children’s magazines where you’re supposed to figure out “what’s wrong with this picture?”
Municipal bond yields are relatively low, which may make some investors wonder about their attractiveness as an investment. However, we have a favorable outlook on munis for the second half of the year, due to a variety of potential tailwinds, including government fiscal support and technical factors.