Inflation

"I think the bond market is right, a recession is coming," said Liz Young, head of investment strategy at SoFi, "and the economic indicators reinforce that message."

"Bond investors bid a not-so-fond farewell to 2022 as they look forward to a much more attractive 2023," said Bryce Doty of Sit Investment Associates.

The state's benchmark debt ratio for debt service to revenue is at 3.78% — well below a 6% target and 7% limit.

It is not clear whether FOMC members truly believe their higher inflation and interest rate forecasts, or if they are being overly hawkish to prevent further market exuberance.

The Federal Reserve will slow the pace of interest-rate increases next month, Federal Reserve Chair Jerome Powel suggested Wednesday, while stressing borrowing costs will need to keep rising.

Some projects that were budgeted and started at the beginning of the inflation spiral are now in jeopardy.

Third-quarter sales tax collections by local governments in New York increased 10.2% year-over-year, but that falls to 1.8% after adjusting for inflation.

Refinitiv Lipper reported $2.537 billion of outflows from municipal bond mutual funds for the week ending Wednesday after $2.389 billion the week prior.

Investors pulled $3.843 billion from mutual funds in the week ending Oct. 26 after $3.876 billion of outflows the previous week, according to ICI.

The upcoming Federal Open Market Committee meeting on Tuesday and Wednesday has led to a lighter new-issue calendar with $2.72 billion on tap.

Municipal to UST ratios have risen this week with the 10-year approaching 90% and the 30-year topping 100%.

The day after the FOMC announces its policy decision, Christian Scherrmann, U.S. Economist at DWS Group, will offer his take on the meeting, Fed Chair Powell's press conference and what comes next.

"Despite a pick-up in volatility in the rates market, municipals have been performing relatively well in October," according to Barclays PLC.

Refinitiv Lipper reported $2.262 billion of outflows from municipal bond mutual funds for the week ending Wednesday after $2.057 billion the week prior.

A whopping 91% of Bond Buyer California Public Finance Conference survey respondents expect municipal interest rates will end the year higher than current rates and 73% said rates will have the largest impact on the public finance industry in the next two quarters

Inflation will fall back down to the Federal Reserve's 2% target by early 2025, the San Francisco Fed said in a research note Friday.

Investors are probably in for disappointment if they continue to fight the Fed.

Public agencies are often "clients of last resort" for contractors, especially when construction costs are high.

Inflation and material shortages are accelerating the P3 trend of bringing in a private team before price is finalized, which could expose investors to cost-escalation risk.

The Investment Company Institute reported investors poured in $1.589 billion into muni bond mutual funds in the week ending August 3, the highest level since November.