Inflation

The Investment Company Institute reported outflows from municipal bond mutual funds but inflows into exchange-traded funds. The February consumer price index came in as expected, while the core was below expectations, and analysts expect bigger rises ahead.

Munis were stronger across the curve as secondary trading was constructive and bellwether credits moved yields lower.

Despite the recent outflows and volatility of the Treasury market, municipal bonds have and should continue to outperform as stimulus from Washington provides some respite.

She has repeatedly rejected concerns that Biden’s stimulus is excessive given the economy’s signs of recovery, and that run-away inflation could damage the economy.

The Beige Book suggests the economy is recovering, with optimism for 6-12 months ahead, while economists don't envision inflation rising enough for the Fed to take action any time soon.

The Federal Reserve is nowhere near to pulling back on its support for the pandemic-damaged U.S. economy, Chairman Jerome Powell signaled at his testimony before Congress on Tuesday.

Federal Reserve Bank of Boston President Eric Rosengren said he doesn’t expect to see sustained 2% inflation for the next two years so long as U.S. unemployment remains high.

The municipal secondary gave way to higher-yields and triple-A benchmarks rose two to five basis points. U.S. Treasuries pared back Tuesday's losses, even on the heels of better economic data.

With the U.S. Treasury sell off, municipal to UST ratios fell below 55% in 10-years.

While most observers expect inflation to grow as the economy heals, the latest CPI numbers suggest that it hasn't yet arrived.