Finance

Muni and UST yields surged Tuesday on expectations the Fed will have to aggressively raise interest rates to bring down inflation.

Fiona Ma delivered speeches Monday at The Bond Buyer California Public Finance conference and California Debt and Investment Advisory Commission pre-conference.

Monday's opening panel of The Bond Buyer California Public Finance conference in Los Angeles was an insiders' look at muni market challenges and opportunity.

Even after investors received an infusion of $18 billion of matured and called bond proceeds on Sept. 1, muni prices have continued to weaken, note CreditSights strategists Pat Luby and John Ceffalio.

Fitch raised Wayne County's rating to A from BBB-plus, putting its fiscal distress further in the rearview mirror following a round of upgrades this year.

The calendar for the week of Sept. 12 is at $6.6 billion while Bond Buyer 30-day visible supply sits at $14.15 billion.

The upgrade "reflects material strengthening of the state's financial resilience and budget management, particularly over the past two biennia," the rating agency said.

The decision follows months of turmoil that left the city without an approved budget well into the new fiscal year, said Moody's analyst Douglas Goldmacher.

Outflows from municipal bond mutual funds receded as investors pulled $1.090 billion out of funds in the latest week, versus the $3.416 billion of outflows the prior week, according to Refinitiv Lipper data.

The Investment Company Institute reported $2.527 billion of outflows from muni bond mutual funds in the week ending Aug. 31 compared to $765 million of outflows the previous week.

The muni market may get a temporary boost of support this week as investors received $18 billion of maturing and called bond proceeds on Sept. 1.

Moody's dropped the city's rating a notch to A3 and kept a negative outlook on the credit. Persistent structural deficits and pension liabilities were factors.

A shift is underway at the Federal Reserve in how to describe neutral — the interest rate level that neither stimulates nor restrains growth — as it debates how much higher to hike.

Investors will be greeted Tuesday with a larger new-issue calendar, estimated at $6.087 billion, up from total sales of $5.551 billion in the week of Aug. 29.

Some Texas lawmakers are pushing legislation that could ensnare muni investment banks offering company funded access to out-of-state abortions for employees.

The 30-member syndicate plans to begin retail order pricing Wednesday with institutional sales planned for Sept. 8 on the new money and refunding GOs.

The Investment Company Institute reported $755 million of outflows from muni bond mutual funds in the week ending August 24 compared to $320 million of inflows the previous week.

The veteran-owned and operated firm complements its continued growth with experienced public finance professional to oversee Southeast banking.

After underperforming USTs last week, "munis have given up their earlier performance advantage for August with both asset classes currently earning virtually the same negative returns," said Jeff Lipton, managing director of credit research at Oppenheimer Inc.

COVID-19 worsened the fiscal picture for the senior care, insurance, and hospital operator, but it faced rating pressure before the pandemic.