Definitely read this article dated April 9th 2025.
- This is a historic opportunistic time to allocate capital to MuniBonds
- especially individual bonds
- avoid the Bonds Funds where your capital is at risk to the behavior of other investors
- unlike Cyber Monday, buyers flee from Wall Street when there is a sale.
Best,
Jeff
Muni Bond Rout Deepens Even More as Investors Panic Sell
2025-04-09 17:03:41 GMT
By Amanda Albright
(Bloomberg) -- Municipal-bond yields surged another 30
basis points Wednesday as the state and local debt market sees a
continued steep selloff.
The rout drove the 10-year AAA benchmark to 3.8% as of
midday, the highest since at least 2011, according to Bloomberg
BVAL. Over the last three trading sessions, that rate has jumped
about 87 basis points.
Patrick Haskell, head of municipal bonds at BlackRock Inc.,
in an interview with Bloomberg Radio said the US state and local
debt market hit “panic levels” Monday and Tuesday. Investors
were “searching for liquidity,” he said.
Following a similar rout in US Treasuries, the slump in the
state and local debt markets may be driven by mom-and-pop
investors selling their holdings to buy stocks or raise cash as
they ride out the wild volatility caused by President Donald
Trump’s tariffs, investors and analysts said.
The amount of municipal bonds out for bid on Bloomberg’s
platform totaled more than $3 billion on Tuesday, the most since
March 2020. That measure signals investors were unloading the
securities en masse, causing prices to drop. Trading also
surged, with over $23 billion worth of bonds trading on Tuesday.
“It’s a major dislocation,” said Giles Nicholson, head of
the public finance quantitative solutions group at Siebert
Williams Shank & Co. “Both investors and issuers are really
struggling to understand what the value of a particular bond
should be like if you’re coming into the primary market — let
alone in the secondary market.”
Municipal-bond exchange-traded funds saw $641 million of
daily outflows as of Tuesday, according to data compiled by
Bloomberg as of Tuesday.
Liquidity is more challenged in the muni market compared to
the corporate bond market as retail buyers make up about 80% of
the investor base, Haskell said.
Seasonally, the spring tends to include tougher months for
performance as supply remains heavy and investors sell their
holdings to pay taxes.
JPMorgan Chase & Co. strategists said in a report that they
are tracking $1.3 billion in outflows yesterday. They added that
figure is understated given that it doesn’t include funds
reporting monthly.
“History indicates that the breadth of the sell-off in the
longer-dated UST market will determine the same in the municipal
market outflow cycle,” the strategists said in the report on
Wednesday morning.
They said that the “the 55bps+ sell-off over the last two
sessions marks the 3rd largest two-day cut historically, only
exceeded during the pandemic and the high-rate environment of
1981.”
Haskell said he was looking to keep elevated levels of
cash, and that muni bonds are trading at levels that are “super”
attractive. “Inevitably in this chaos, there will be
opportunity,” Haskell said.
--With assistance from Erin Hudson, Paul Sweeney and Tom Keene.
To contact the reporter on this story:
Amanda Albright in New York at aalbright4@bloomberg.net
To contact the editors responsible for this story:
Danielle Moran at dmoran21@bloomberg.net
Nina Trentmann
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