$9 Trillion in Cash & CDs... looking for a permanent home?


The #MuniBond market, measured by the Bloomberg Municipal Bond Index, is down 0.37% year to date through end of February 2024. The curve remains inverted, and we have seen some new supply indigestion with dealer balances growing. At $71.7 Billion, the YTD issuance is 37% higher than same time in 2023.

However, the forward-looking calendar for new supply is robust and current demand, measured by investment grade #MBMFF (MuniBond Mutual Fund Flows) is also strong measured by 5 out of 8 weeks of inflows so far in 2024. In addition, the some of the new deals coming to market have been 10-15x oversubscribed. Demand is strong but it is not the insane 2021 strong. (average of $2 Billion a week inflows to #MBMF for 50 consecutive weeks )

There is a record $9 Trillion in money market funds and CDs. If FOMO overpowers Fear, Complacency and #TbillnChill, we could see significant flows into #MuniBonds, #Bonds, and #equities.  Money Market yields fluctuate daily, so you might want to get in front of this wave of capital, if you are considering locking in juicy yields for a guaranteed amount of time.


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