International taxes

New York's capital needs mean the city cannot afford to be picky about market timing for bond deals, said Jay Olson, deputy comptroller for public finance. 

Friday saw munis sell off once more with yields cut 17 to 28 basis points, pushing muni-UST ratios higher but not quite reaching Wednesday's levels.

"Anytime you get a market off 50 basis points in a day, the bulk of that move is being driven by fast money and the fast money is in ETFs," said Michael Pietronico, CEO at Miller Tabak Asset Management.

Yields rose significantly for the fourth time this week as the aftereffects of President Donald Trump's tariffs continue to plague the financial markets.

"The discussion about policies regarding tariffs will drive performance in bonds over the next three to six months," said Michael Pietronico, CEO of Miller Tabak Asset Management.

From 90 basis points of movement in three days to rising ETF influence and potential tax status changes to municipal securities, this timely discussion from Thursday's Texas Public Finance event features real-time analysis and sharp insights from muni leaders at Morgan Stanley, BlackRock, Nuveen, Truist, and PFM.

Speaking live at The Bond Buyer's Texas Public Finance Conference in Austin, leading muni voices broke down the historic rate swings that rocked the market this week, the growing impact of investor behavior, and the uncertain path ahead for tax policy — offering candid assessments, sharp data points, and diverging views on what investors and other market participants should expect next.

Triple-A muni yields plummeted up to 50 basis points Thursday in a dramatic reversal from the week's earlier collapse. Speaking live at The Bond Buyer's Texas Public Finance event, market leaders painted a picture of extreme volatility, impaired liquidity, and an uncertain path forward.

The Bond Buyer took the pulse of municipal bond market pros to see what they are doing and advising in the midst of the volatility driven by President Trump's shifting tariff policies.

"The equity market is looking at this more positively, but bonds are still thinking, 'Well, these tariffs still have to be resolved,'" said Kim Olsan, a senior fixed income portfolio manager at NewSquare Capital.

The top 25 state and local pension funds alone have seen the value of their public equities investments drop by a total of nearly a quarter of a trillion dollars in 2025, with roughly $169 billion of those losses coming during the four trading days that followed the Trump administration's April 2 announcement on global tariffs, a think tank said Wednesday.

Stocks surged moments after Trump's announcement of the 90-day pause for most countries on high tariffs he announced last week that have roiled markets.

Municipal AAA yield curves were cut up to another 42 basis points, depending on the curve, as of noon, pushing yields to multi-year highs and long-end muni to UST ratios above 100%. Muni yields have risen up to nearly 100 basis points in spots since the bond market rout began.

A $125 million bond sale by the Indianapolis Local Public Improvement Bond Bank for Indianapolis public transit operator IndyGo is on day-to-day status.

Weakness in the muni market has been partly amplified by ETF selling; high-grade yields rose more than 60 basis points on parts of the curve over two sessions.

"The changing momentum on what the market is looking for on tariffs and the volatility in the equity market is spilling over into the Treasury market, and munis can only fight the Treasury market for so long," said Pat Luby, head of municipal strategy at CreditSights.

"In the aftermath of this week's Treasury yield move lower, MMD-UST ratios have reached short-term highs," Barclays strategists said.

"With the initial announcement proving to be more aggressive than expected, the market responded overwhelmingly negatively," said Principal Asset's Seema Shah.

As the market absorbs the effects of the tariff rollout industry analysts are predicting a heavy dose of uncertainty in several key sectors of the municipal bond market.

At noon Thursday, muni yields had been bumped up to 12 basis points, depending on the curve, while UST yields rallied, with yields falling 13 basis points on the short-end.