Economic & Market Commentaries

"After months of negotiations, President Trump signed into law the “One Big Beautiful Bill Act (“OBBBA”)” on July 4th. While there are wide-ranging implications for the economy, individuals, and corporations, it is our opinion that the impact of the OBBBA provisions on the municipal market will be relatively modest..."

"Moody’s Investor Services downgraded the US Government’s credit rating from Aaa/negative to Aa1/stable on May 16th, reflecting accelerating deficit growth and associated borrowing requirements, a fiscal situation exacerbated by recently elevated borrowing costs.  Despite considerable attention being paid to federal spending cuts, Moody’s noted a lack of faith in the willingness of Congress to actually reduce the deficit, and US debt levels have now reached thresholds that are materially weaker than other Aaa-rated peers..."

"The high-grade tax-exempt markets are typically characterized by relative price stability, particularly when contrasted with lower grade credits, let alone equities. But it’s been anything but the case so far in April, as extreme volatility has driven up municipal yields at an unusual pace. Advisors and investors are understandably looking for answers, and we aim to provide some below. The primary driver of this turbulence is a liquidity crunch, which has been exacerbated by the factors noted below..."

"Exchange-Traded Funds, or ETFs, have arguably been one of the most important investment innovations in recent decades. They allow retail investors to combine the modest investment minimum and broad diversification benefits of mutual funds with the real time intra-day liquidity of stocks. Further, ETFs also offer tax efficiency, in part by not requiring a sale of securities (and the potential realization of capital gains) to meet other investors’ withdrawals..."

2025 Appleton Partners Municipal Sector Outlooks