Munis’ strength continues into Fed week
Munis’ strength continued Monday, as U.S. Treasuries cheapened at the front end and equities ended higher.
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Munis were bumped by up to 12 basis points, with the biggest gains at the front end. USTs cheapened by up to three basis points at the short end and richened by up to three basis points out long.
Supportive UST yields and the Federal Reserve week’s lighter supply have helped munis continue their rally, said NewSquare Capital’s Kim Olsan.
Some scales show muni yields almost as low as they were at the beginning of September, Olsan said, “which is sort of crazy to think about.”
It helps, Olsan said, that observers aren’t expecting the
“It’s a little surprising that, as big as the correction was, almost all of it is recouped at this point,” Olsan said. “Maybe it was overdone, and now it’s just adjusting back. Still, overall, I think it’s a really attractive time to be invested.”
The market may see more volatility depending on the results of the midterm elections, Olsan said, especially since November will be light on redemptions. However, if weakness does arise, she expects it to be short-lived.
