Jessica Lerner

Three of the hires are group heads in public sector and structured finance businesses at the firm.

Munis should remain well bid until issuance picks up "dramatically," said Nuveen's Anders S. Persson and Daniel J. Close.

CreditSights said states with the largest payments are Texas at $2 billion, Pennsylvania at $1.5 billion, South Carolina at $1.3 billion and California at $1.2 billion

With a recent court ruling and higher interest rates in their favor, more issuers are likely call back their outstanding BABs using the extraordinary redemption provision.

Supply is expected to increase in the coming weeks, and there may be more rate-direction volatility, said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

"We built a modern marketplace that provides an equity-like trading experience back to the brokerages," said Jonathan Birnbaum, OpenYield's founder and CEO.

Policymakers appear to be concerned about the possibility of cutting interest rates too soon, according to minutes of the Federal Open Market Committee's Jan. 30-31 meeting, released Wednesday.

"With the new economic data signaling a delay of the Fed starting rate cuts to further into the year, we should continue to see yields rise until we get near to the Fed's target of a 2% 'neutral' rate for inflation," said Jason Wong, vice president of municipals at AmeriVet Securities.

All municipal bond insurers wrapped $35.381 billion in 2023, a 5.8% increase from the $33.428 billion insured in 2022, according to LSEG data.

Bond volume fell slightly, as volatility, higher interest rates, falling pandemic aid and slower economic growth kept issuers on the sidelines.

Issuance has fluctuated throughout the years since the financial crisis, following interest rate changes — rising when rates rise and falling when rates fall — but the totals have come in well below $15 billion every year since 2012, save for 2017 when $15.234 billion was sold.

"Tight underwriting spreads in 2023 followed, for the most part, a well-entrenched trajectory that has backdropped the primary municipal market for years, and so the negligible bump in spreads does not come as a surprise," said Jeff Lipton, managing director of credit research at Oppenheimer.

This decision will accelerate foreign buyers' reduced presence in the muni market, said Vikram Rai, head of municipal markets strategy at Wells Fargo.

Municipal bond mutual funds saw the second week of outflows, with LSEG Lipper reporting $142.2 million of outflows for the week ending Wednesday. High-yield funds saw inflows.

Despite losses, munis are still outperforming USTs and corporates on a month-to-date and year-to-date basis, noted Cooper Howard, a fixed-income strategist at Charles Schwab.

The consumer price index number further complicates market expectations of Fed rate cuts and muni investors may want "to keep their powder dry" until they have a better idea of the Fed's timing, said CreditSights' Pat Luby.

The muni market will see "continued strength," said Wesly Pate, senior portfolio manager at Income Research + Management, largely due to a a dearth of new-issue supply.

This volatility can be seen in the whipsawing figures from the SIFMA Municipal Swap Index Yield over the past few months, but in January in particular.

Municipals were steady to improved in spots in secondary trading as another day of sizable new-issues were well-received in the primary market.

Some participants on the Street estimate that SMAs hold as much as $1.5 trillion of munis while others peg it closer to $1 trillion to $1.3 trillion.