Municipal bonds are key to reaching the infrastructure goals laid out in President Obama’s State of the Union Address, but curbs on tax exemption could make it difficult to fund the large-scale projects he described, market participants said Wednesday.

“I was glad to see talk in the State of the Union about the need to do something about infrastructure,” said Bill Daly, director of governmental affairs at the National Association of Bond Lawyers. “Balanced against that, I am concerned about [tax reform] and I expect it will include the cap ... on tax exempt interest.”

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