Muni-Bond Watch: Changing Rules, Rising Rates
Lord Abbett's Investment Perspectives
Muni-Bond Watch: Changing Rules, Rising Rates
Daniel Solender, CFA
Partner & Director of Tax-Free Income
Dan Solender: Hello. My name is Dan Solender. I'm director of the tax-free fixed income group.
What's top of mind for muni investors?
Solender: I think we focused a lot on global issues today, so for my final thoughts I'll focus more on things specific to the municipal bond market. And one of the first ones to think about is that, you know, everyone's focused on interest rates rising, and the thing is, we've been up almost half a percent in most interest rates this year. And if people look at how the returns have been so far this year, it's interesting they're up a little bit or maybe down a little bit less than 1%. And the impact from rates rising has not been that bad on portfolios, so portfolios can handle it better than most people might expect.
Another interesting thing I'm thinking about on the municipal bond side is the new regulations this year and the M.S.R.B. rule requiring dealers to put their markups on bonds and disclose 'em on their confirms to clients. Itâs having a big impact, bringing a lot of demand into our market. That's something to watch going forward as all these different approaches to it are being used in the market.
And then finally, just looking at our market, the supply's been low. We have a lot of interesting components from the tax bill and just watching going forward how they impact our market, which so far has been a benefit for us. So overall, things are good.
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