If the proposed 28% cap on the value of tax exemption were enacted, the municipal bond market would become more volatile and would likely significantly deter investors from buying munis, Loop Capital Market’s analysts said Monday.

In their 5th annual outlook conference call with investors and issuers, the analysts discussed various factors affecting the muni market right now, including the 28% cap that was proposed by President Obama twice and recently floated during the fiscal cliff discussions between the administration and Congress.

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