FOMC

With the Federal Reserve planning aggressive rate hikes and balance sheet reduction, Dec Mullarkey, managing director of investment strategy and asset allocation at SLC Management, discusses the Federal Open Market Committee meeting minutes, his analysis of the economy and what to expect going forward. Gary Siegel hosts. (33 minutes)

Investors pulled more from municipal bond mutual funds in the latest week, with Refinitiv Lipper reporting $3.247 billion of outflows, of that $1 billion was high-yield. ETFs are still seeing inflows.

Investors pulled more from municipal bond mutual funds as the Investment Company Institute reported $4.5 billion of outflows in the week ending March 30.

Details on how officials expect to proceed are expected to be revealed on Wednesday when the Fed publishes minutes of its March 15-16 meeting.

Outflows continued, with Refinitiv Lipper reporting investors shed $1.503 billion from municipal bond mutual funds in the week, following outflows of $2.136 billion in the previous week. High-yield saw small inflows.

Scott Colbert, executive vice president and chief economist at Commerce Trust Co., will discuss the Federal Reserve's monetary policy decision and where they go from here.

Muni performance has been strong as of late, and spreads have actually corrected after a month of gradual widening.

The U.S. Federal Reserve will need to raise interest rates higher than officials are currently projecting if it is to wrestle inflation back under control, former U.S. Treasury Secretary Lawrence Summers said.

Outflows continued, rising significantly in the latest week, with Refinitiv Lipper reporting $2.136 billion coming out of municipal bond mutual funds, following outflows of $661.675 billion in the previous week.

The Investment Company Institute on Wednesday reported $2.258 billion of outflows in the week ending March 9, down from $3.502 billion of outflows in the previous week.

As 2022 unfolds, a confluence of challenges has affected pricing, trading and fund flows in the muni market.

The market is being driven by the prospect of higher long-term inflation and the potential that the Federal Reserve may have to raise rates further than expected.

Democratic Sen. Joe Manchin said he won’t back President Joe Biden’s nominee for the Federal Reserve vice chair of supervision, Sarah Bloom Raskin — likely dooming her confirmation in the Senate given Republican opposition.

DASNY leads the calendar with $2.3 billion of exempt personal income tax bonds and $662.32 million of taxables. Potential volume is slated to be $5.11 billion, with $4.392 billion of negotiated deals and $718.1 million of competitive loans.

Sarah Bloom Raskin’s nomination to be Federal Reserve vice chair of supervision has taken another hit as key Senate Democrat Joe Manchin suggested President Joe Biden’s other four central bank nominees move forward without her.

Federal Reserve Bank of Chicago President Charles Evans said the central bank should increase interest rates to close to its “neutral” setting this year, implying as many as seven quarter-point hikes.

The Russian invasion of Ukraine could slow interest rate hikes and has led the market to pull back on the chances of a 50-basis-point liftoff.

Federal Reserve Bank of Atlanta President Raphael Bostic said he favors raising interest rates by 25 basis points at the Federal Open Market Committee’s March meeting but would consider a larger half-point move if monthly inflation readings fail to decline from elevated levels.

“With inflation well above the FOMC’s longer-run objective and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Fed said.

The Federal Reserve formally adopted tough, sweeping restrictions on officials’ investing and trading, aiming to prevent a repeat of the ethics scandal that engulfed the U.S. central bank last year.