FOMC

The Federal Reserve Bank of Chicago appointed Austan Goolsbee, an economist and former adviser to President Barack Obama, as its new president to replace Charles Evans, who retires in January.

The Federal Reserve will slow the pace of interest-rate increases next month, Federal Reserve Chair Jerome Powel suggested Wednesday, while stressing borrowing costs will need to keep rising.

The Bloomberg Municipal Index is at positive 4.06% as of Friday. Bloomberg indices show high-yield returning 4.17%, taxable munis returning 4.38% in November while the Impact Index is at positive 4.66%.

Markets took the news that it will soon be appropriate to increase the Fed funds target rate at a slower pace as good news.

Federal Reserve Bank of St. Louis President James Bullard urged policymakers to raise interest rates further, saying the level will need to be higher to meet the central bank's goal to be "sufficiently restrictive" to bring down inflation.

Federal Reserve officials stressed the need to keep raising interest rates while acknowledging recent encouraging news on U.S. consumer prices.

Federal Reserve Governor Christopher Waller said "we've still got a ways to go" before the central bank stops raising interest rates, despite good news last week on consumer prices.

The Federal Reserve looked closer to moderating aggressive interest-rate increases after welcome news on inflation, with three officials backing a downshift even as they stressed that policy needs to stay tight.

Boston Federal Reserve Bank President Susan Collins said monetary policy is entering a new phase that could require smaller rate increases.

High-yield saw outflows of $867.067 million after $594.497 million of outflows the week prior while exchange-traded funds saw inflows of $736.967 million after $444.544 million of inflows the previous week.

Investors pulled $3.843 billion from mutual funds in the week ending Oct. 26 after $3.876 billion of outflows the previous week, according to ICI.

October returns were in the red with the Bloomberg Municipal Index showing a loss of 0.83% for the month, bringing total losses in 2022 to 12.86%. Only May and July saw positive returns for the asset class.

With the Federal Reserve's hike pretty much expected, analysts will search for clues about future moves.

Total October volume was $24.951 billion in 510 deals versus $41.811 billion in 1,068 issues a year earlier, according to Refinitiv data.

The day after the FOMC announces its policy decision, Christian Scherrmann, U.S. Economist at DWS Group, will offer his take on the meeting, Fed Chair Powell's press conference and what comes next.

"It should at least be something we're considering at this point, but the data haven't been cooperating," Daly said Friday.

"Despite a pick-up in volatility in the rates market, municipals have been performing relatively well in October," according to Barclays PLC.

Refinitiv Lipper reported $2.262 billion of outflows from municipal bond mutual funds for the week ending Wednesday after $2.057 billion the week prior.

Triple-A yields rose more than three-quarters of a point on the front end and nearly half a point out long in September as munis posted 3.84% losses.

"All of you who are looking for a pivot, be careful what you wish for," the chief economic adviser at Allianz SE and Gramercy Funds chairman said.