Inflation

The state managed to grow revenues above forecast for the first two months of the fiscal year despite the delayed tax filing deadline.

There hasn't been a huge return of capital in the muni market so far this year, with fund flows being rather anemic, said Chad Farrington, co-head of municipal bond strategy at DWS Group.

Despite this, August saw the largest monthly volume of 2023, helped by several billion-dollar deals and multiple Texas school district deals.

Tracey Manzi, senior investment strategist at Raymond James, talks with Chip Barnett about the fixed income markets today and how munis and Treasuries are doing. She says the number one issue clients are asking about is inflation. (20 minutes)

Another day of mixed inflation data led Treasury yields to rise but munis mostly stayed put after underperforming a UST rally earlier in the week. The market is also focused on the $9 billion of redemption flows coming on Tuesday.

Refinitiv Lipper reported $278.559 million of inflows into municipal bond mutual funds for the week ending Wednesday, led by exchange-traded funds.

Eric Merlis, managing director and co-head of global markets at Citizens Bank, talks with Chip Barnett about the economy and financial markets and what the Federal Reserve might do. He also discusses possible near- and long-term economic scenarios. (15 minutes)

Municipal bond mutual fund outflows continued as Refinitiv Lipper reported investors pulled $136.174 million from the funds for the week ending Wednesday following $855.719 million of outflows the week prior.

Escalating costs, particularly for wages, could strain budgets or drain reserves, the rating agency said.

While "munis are set up for better performance, perhaps modest single-digit returns, the near-term outlook for fund flows will make for a challenging read," Oppenheimer's Jeff Lipton said.