Markets

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.

Natural gas prepayment deals helped drive the utilities sector to top the Southeast in an overall down year for municipal bond sales across the region.

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.

Pensions funds are increasingly investing in riskier asset classes, with more than half their investments in 2022 in these, according to some estimates.

"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.

A private university in Milwaukee will borrow $163.7 million through tax-exempt bonds to build new emergency response facilities for the state and county.

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.