Gary Siegel

The sell-off in the back half of February brought negative 1.59% returns for the month and a negative 0.96% return for the year so far. Taxables and high-yields fared slightly better.

Municipal bond mutual funds took notice of rate movements with Refinitiv Lipper reporting $37 million of inflows after 15 weeks of multi-billion inflows, the lowest since Dec. 2. High-yield funds took a big hit with $330 million of outflows.

In a wide-ranging conversation, Manulife Investment Management Global Chief Economist & Global Head of Macroeconomic Strategy Frances Donald discusses the COVID pandemic, inflation, how the markets may be misreading the Fed, why economic indicators may not be telling economists what they need to know, ESG and green spending, and the economy. Gary Siegel hosts. (35 minutes)

Global bond yield move suggests financial markets are much more optimistic about the economy than the Fed.

Data released Monday showed economic strength with further improvement ahead. U.S. Treasuries were off by five basis points but municipals saw aggressive eight to 10 basis point swings to higher yields across the curve.

The municipal secondary gave way to higher-yields and triple-A benchmarks rose two to five basis points. U.S. Treasuries pared back Tuesday's losses, even on the heels of better economic data.

With the U.S. Treasury sell off, municipal to UST ratios fell below 55% in 10-years.

The COVID-19 pandemic threw the economy into disarray, creating uncertainty in so many areas, and economists still don’t agree on the future of inflation. But they agree the Fed will need to adjust when the economy starts to improve.

While most observers expect inflation to grow as the economy heals, the latest CPI numbers suggest that it hasn't yet arrived.

Why has inflation remained low and how will the economic recovery impact it? Several experts offer their views as to whether inflation is or will be a problem.

The January employment report headline number disappointed while stimulus news lifted equities and U.S. Treasuries rose on both counts. Municipals ignored those moves ahead of another week of less-than-ample supply.

No rate hikes in sight as employment continues to struggle and inflation should rise this year, but not enough to force the Fed to raise rates.

ICI reports a third week of $3-plus billion of inflows. Couponing is becoming as much a factor in inquiry as credit and issuers move to lower coupons in both competitive and negotiated deals.

Rich ratios focus buyers' eyes on a primary market that simply doesn't have enough supply to keep up with demand.

It is most certainly an issuers' market as rates are low, credit spreads continue to tighten, money pours into municipal bond mutual funds at record levels and a net negative supply of more than $11 billion.

Chicago Board of Education bonds were repriced to lower yields by as much as 37 basis points, showing just how far investors will go for any incremental yield.

Fed chair says it's unlikely there will be "troubling inflation" any time soon, and rates will stay low and asset purchases will continue at current levels. ICI reports another $3.24 billion of inflows as munis follow UST to lower yields.

New issues priced with ease with high-grade issuers tight to triple-A benchmarks. It was the first time the municipal yield curve saw such noticeable movement, following little changed secondary activity for nearly the past two weeks.

Returns of all the investment grade options "pale in comparison to those for municipal high-yield," which should bolster Texas gas and Chicago public schools deals.

Refinitiv Lipper reports another multi-billion week of inflows, the domino effect from such strong flows is that secondary selling doesn’t need to be so active, creating fewer opportunities for new inquiry, analysts say.