Inflation

The 2-, 5- and 10-year UST is higher than before the pandemic began as investors factor in a rate hike as soon as March.

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.

For investors in the municipal bond market, 2021 proved to be a year of hurdles. This is likely to change, particularly for investors in the municipal bond market.

Supply is beginning to roll in and the primary action on Wednesday provided more direction. ICI reports $1.4 billion of inflows.

Other concerns include ongoing threats from the coronavirus, inflation and legislative inertia on muni issues in Washington, according to a Bond Buyer survey.

Pressures from inflation concerns and broader rising rates weigh on munis in the second week of 2022.

Municipals triple-A benchmarks continue the trend of ignoring other markets to start 2022. The new year will likely usher in slower growth and continued inflationary pressures, analysts said.

Tax risks continue to linger as they are preserved as a potential offset for whatever level of spending all 50 Democratic senators can agree to, but potential approval of the legislation remains a question mark.

Municipal market participants need to be vigilant in monitoring liquidity and the impact of growing inflation.

U.S. Treasuries saw losses pushing municipal to UST ratios on the 10- and 30-year lower again.