Fixed income

As Congress grinds through the budget reconciliation, fixed income market experts are eyeballing an uncontrolled national debt while dreading a heavy-handed response from the Treasury bond market.

Bond yields are shooting up for the second time in as many months. Federal Reserve Gov. Christopher Waller attributes the volatility to concerns about rising national debt levels.

Democrats on the House Ways and Means Committee announced a new bill that would restore the power of applying tariffs back to Congress amidst accusations of market manipulation and political ineptitude by the Trump administration.

Some analysts believe that the muni market will ultimately be insulated from any changes in tax status because of the benefit it already provides.

The rising costs of federal debt, an impending budget showdown, and Congressional turmoil is highlighting the complex relationship between Treasury securities and municipal bonds.

State and local governments are on strong financial footing and are investing in Treasury securities as chaotic federal moves shake out.

Economic forecasts include the possibility of higher inflation and slower growth that could stall future cuts to the federal fund rates.

Louis English joined Janney Montgomery Scott as managing director and head of municipal sales in the fixed-income division, based out of the Chicago office.