Viewing by:

Economic & Market Commentaries

2024 Municipal Sector Outlook

Read More

A Distorted Landscape: How Debt-Weighted Bond Indices Create Investor Risk

"One of the unexpected challenges of managing fixed income portfolios is how much of the capital markets have an equity bias. From regulatory guidance to risk measurement conventions, much of the framework of the markets we trade in appears to have been written primarily with equities in mind..."
Read More

The Case for Adding Duration

“This summer we started suggesting investors consider rethinking their bond portfolio duration. After abrupt selling pressure subsequently pushed longer yields up another 70 bps at the end of Q3 and into early October, more support for our view appears to have developed. If the argument was strong then, it is even more compelling now, with bond yields higher than they have been in nearly 20 years.”
Read More

Municipal Credit Implications of a Federal Government Shutdown

“There have been 14 federal government shutdowns since 1981 with nine lasting more than one business day. While federal employee furloughs and interruptions in federal aid distributions may cause very short-term adjustments for municipal issuers, based on past experience, we believe that a federal government shutdown that lasts beyond a few weeks would have minimal impact on the creditworthiness of municipal bond issuers.”
Read More

Here We Go Again: Implications of a Potential Government Shutdown

“Little more than four years have passed since the last US government shutdown. Yet, absent a last-minute breakthrough, the federal government is on track to shut down again in the early morning hours on October 1st, as the 2023 fiscal year budget expires. We see a shutdown as nearly inevitable at this point, so our focus has turned to the likely path to reopening, and the probable market implications of these events.”
Read More

Urban Budget Analysis Requires Looking Beyond The Headlines

"Extraordinary periods of time often introduce structural changes long after the precipitating event  passes, and by many measures the impact of COVID-19 fits this pattern."
Read More

US Credit Taken Down a Notch

"On the evening of August 1st, Fitch downgraded the US Treasury credit rating from AAA to AA+, and lowered federal agency debt, including Fannie Mae and Freddie Mac, in line to AA+ one day later."
Read More

The Case for Adding Duration

"As an active fixed income manager, one of the most frequent questions we’ve been asked in the past year is, with shorter bonds out-yielding longer ones, why wouldn’t you just buy the shorter ones?"
Read More

Debt Ceiling Drama: Thoughts and Implications

"The debt ceiling refers to a limitation imposed by Congress back in 1917 that caps the amount of outstanding debt that the US can offer. Currently $31 trillion, the debt ceiling relates to Treasury’s ability to fund appropriations Congress has already approved, not future spending."
Read More

The Golden State is Forced to Confront Fiscal Challenges – California Credit Brief

"Persistently tightening monetary policy and a slowing economy have begun to work their way into state tax revenue collections. Across the nation, median growth in monthly revenues slowed from double-digit levels early in 2022 to low-single digits by year-end."
Read More