Inflation

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.

Consumer expectations for U.S. inflation over the coming years declined sharply in the latest survey by the Federal Reserve Bank of New York.

With the Fed committed to fighting inflation with aggressive rate hikes, fewer issuers want to take the risk with taxable advance refundings.

“We have to be able to build things better and faster in this country and you don’t have to be a Democrat or a Republican to agree with that."

Primary market takes focus for large revenue deals from the New York State Thruway Authority and the Colorado Health Facilities Authority.

Considering pension risks within the framework of municipal credit analysis is particularly important now, following a lengthy period in which the global economy experienced low interest rates and low inflation.

As investors shift the focus from inflation to recession concerns, fixed income markets, including munis, may regain some of the year's losses.

Investors pulled more from municipal bond mutual funds, with Refinitiv Lipper reporting $1.3 billion of outflows, down from the $1.6 billion the week prior and bringing the total to $47 billion year-to-date.

Federal Reserve Bank of St. Louis President James Bullard said fears of a U.S. recession are overblown.

Refinitiv Lipper reported smaller outflows at $1.6 billion, down from the $5.6 billion the week prior. It brings the total outflows to $45.7 billion year-to-date.

Construction material costs, which often rise faster than the consumer price index, have surged over the last year while a shortage of skilled construction workers has plagued the industry.

The Federal Reserve has started a hiking cycle that's expected to continue with half-point increases in June and July, Marvin Loh, senior macro strategist at State Street Global Markets, will assess the June Federal Open Market Committee meeting and tell what he expects the panel to do in the future.

If the inflation figures begin to move lower, then there is a reasonable chance of working through this cycle of rising rates without experiencing a recession.

The 25-basis-point move to higher yields is the largest one-day change in triple-As since March 2020 when COVID began roiling markets. Munis could not ignore a continued selloff in UST led by inflation and recession concerns.

Ahead of the FOMC meeting, municipal issuers pull back. Investors will be greeted Monday $2.880 billion of new-issue supply.