FOMC

Refinitiv Lipper reported a significant drop in municipal bond mutual fund inflows at $36 million in the latest week, a signal the volatility of other markets may be creeping in. High-yield saw $53 million of inflows.

Powell says the FOMC will consider ramping up tapering when more information about Omicron and its impacts are known, further flattening the UST yield curve.

San Francisco Federal Reserve Bank President Mary Daly was considered by the Biden administration for a seat on the U.S. central bank’s board and she declined, according to two people familiar with the matter.

President Joe Biden met separately with Federal Reserve Chairman Jerome Powell and Fed Governor Lael Brainard at the White House on Thursday as he considers who will lead the central bank next year.

As the Federal Open Market Committee meets to discuss monetary policy, Gary Pzegeo, head of fixed income at CIBC Private Wealth will discuss his thoughts about what will come from the meeting.

After the FOMC made taper official, high-grade benchmark yields ended the day one to three basis points better while USTs ended the day higher after an up-and-down trading session that moved the 30-year back above 2%.

President Joe Biden said he’ll announce soon his choice of nominees for chair and other vacancies on the Federal Reserve, amid a scandal over stock trades by central bank officials.

The FOMC will likely take the opportunity to profess its reliance on data to decide liftoff and reiterate the threshold for a rate hike remains higher than for taper.

Jerome Powell is widely expected to be renominated to a second term as Federal Reserve chair, but his chances have been modestly dented by the revelations of stock trading by some senior Fed officials in 2020, according to economists surveyed by Bloomberg News.

Though monetary policy has been in the forefront, at mid-month the tone changed with global inflation outlooks and federal infrastructure and social package in flux.

A lighter, $5 billion calendar, heavy on healthcare, kicks off November. Most participants agree volatility in U.S. Treasuries will be a leading factor for municipal market performance. Uncertainty in Washington also isn't helping the asset class.

ICI reported the lowest inflows since outflows in March, while exchanged-traded funds saw an uptick.

Jeffrey Cleveland, chief economist at Payden & Rygel, discusses the Federal Reserve’s upcoming meeting, inflation, what taper will mean, when the Fed might decide to lift off, and possible leadership changes. Gary Siegel hosts. (30 minutes)

Despite a short-end U.S. Treasury rally, municipals face pressure on the one- and two-year as participants look to month-end positioning.

Friday’s data suggested inflation remains a problem, as the voices calling for Federal Reserve action increase.

Another round of inflows was reported from the Investment Company Institute — the 31st consecutive week — but they came in at $308 million for the week ending Oct. 6, the lowest since outflows in March.

Federal Reserve Vice Chair Richard Clarida traded between $1 million and $5 million out of a bond fund into stock funds one day before Chair Jerome Powell issued a statement flagging possible policy action as the pandemic worsened, his 2020 financial disclosures show.

Fed ethics questions spread to Barkin on McKinsey’s opioid role

CB President Christine Lagarde said Wednesday that inflation “is largely attributable to the reopening of the economy.”

U.S. Treasuries sold off by double digits while municipals cut levels by one to three basis points. Refinitiv Lipper reported another $1.55 billion of inflows for the 29th consecutive week.