New York City Transitional Finance Authority

The recommendation would build reserves toward a target of 16% of tax revenues in order to prevent drastic service cuts during a recession.

Improving tax revenues allowed the mayor to increase the size of his spending proposal while keeping the budget balanced.

The Investment Company Institute on Wednesday reported another round of large outflows, this week at $3.502 billion, up from $2.647 billion of outflows in the previous week.

The City Council on Wednesday began the first of a series of hearings on Mayor Eric Adams' $98.5 billion preliminary fiscal 2023 budget.

Refinitiv Lipper reported $238.926 million of outflows, but $182.035 million of inflows to high-yield, reversing last week's outflows. New-issues faced concessions.

The largest deal of the week comes from the New York City Transitional Finance Authority with $950 million of exempts and $250 million of taxables.

Mayor Eric Adams’s proposal to ask the state to raise the Transitional Finance Authority’s bonding authority by $19 billion is being opposed by Comptroller Brad Lander.

Marjorie Henning was named deputy comptroller for public finance and Michael Haddad is interim chief investment officer and deputy comptroller for asset management.

While move-outs still outpace move-ins, the rate at which people are leaving has slowed and returned to near pre-pandemic patterns. A return by workers to offices is also rising, but occupancy in the city remains lower than almost all major metropolitan areas in the U.S. except for San Jose and San Francisco in California.

ICI reported $1.99 billion of inflows into municipal bond mutual funds, bringing the total to $69 billion for 2021.

Daily bid-wanteds totals per Bloomberg have fallen to an average par value below $450 million from $640 million per day during the first quarter and $549 million in the second.

Returns of negative 0.40% would be the third-worst August performance of the past 10 years, according to Bloomberg data.

Experts agreed that Federal Reserve Board Chair Jerome Powell acknowledged the Fed could start tapering this year and that it would have no implications for liftoff, but not everyone was satisfied with what they heard.

With all eyes on Friday’s employment report, since several additional strong months of gains are needed for the Federal Reserve to be comfortable announcing a tapering of its asset purchases, Wednesday’s news could signal trouble.

Muni participants await a new month with growing issuance, but perhaps not quite enough as issuers are hesitant to add more debt before final word from Washington on infrastructure.

The Dormitory Authority of the State of New York overtook California for the most issuance, while New York issuers made up half of the top 10.

Municipal bond issuers in the State of New York accounted for half of the top 10, while issuers from California held two of the top four spots.

Both personal income and expenditures dropped in February, while personal consumption expenditures also came in weaker than expected, meaning inflation remains in check for now.

ICI reported another week of inflows at $2.23 billion. U.S. Treasuries strengthened further as COVID-19 concerns linger with shutdowns in Germany and spreads elsewhere. Equities were mixed.

Monday’s economic data suggested weakness, with existing home sales declining for the first time in four months and the Federal Reserve Bank of Chicago’s National Activity Index slipping into negative territory, but economists are not concerned.