Investment funds

In a week marked by inflation and jobs data that made clearer the Federal Reserve will not be cutting rates nearly as much or as many times as some had expected even a week ago, Friday's headlines further complicated the landscape for investors and munis have had little choice but to go along for the ride.

Municipal bond mutual funds saw the seventh consecutive week of inflows and the 14th week of inflows for high-yield funds.

Adding the funds will let Easterly offer municipal bond investment options.

LSEG Lipper reported fund inflows of $447 million while high-yield muni bond funds saw another round of inflows at $246 million, marking the 12th consecutive week of positive flows in that space.

Most of the selling during tax season happens on the front end of the curve, said Wesly Pate, senior portfolio manager at Income Research + Management.

LSEG Lipper reported fund inflows of $63.8 million for the week ending Wednesday following $300.5 million of inflows the prior week. High-yield saw its 11th consecutive week of inflows at $180.4 million, down from $278.6 million the week prior.

"The balance of March may continue to be better-than-expected, particularly given existing demand and decent reinvestment needs over the next 30 days," according to Oppenheimer's Jeff Lipton.

Federal officials are pushing for reauthorization while cities tout their planning.

The market is being led more by supply and demand than ratios or even rates. As ratios sit at extremely tight levels, there are buyers engaging at these levels, but large amounts of cash continue to sit on the sidelines.

The nation's capital is a hub of potential sports facility financing.

This decision will accelerate foreign buyers' reduced presence in the muni market, said Vikram Rai, head of municipal markets strategy at Wells Fargo.

Municipal bond mutual funds saw the second week of outflows, with LSEG Lipper reporting $142.2 million of outflows for the week ending Wednesday. High-yield funds saw inflows.

Despite losses, munis are still outperforming USTs and corporates on a month-to-date and year-to-date basis, noted Cooper Howard, a fixed-income strategist at Charles Schwab.

Municipals were steady to improved in spots in secondary trading as another day of sizable new-issues were well-received in the primary market.

The primary saw strong demand with the Triborough Bridge and Tunnel Authority doubling the size of its deal to $1.6 billion.

The inflows into muni mutual funds mark a reversal from 2022 and 2023.

LSEG Lipper reported Thursday that investors added $210.6 million to municipal bond mutual funds for the week ending Wednesday — the third consecutive week — after inflows of $898 million the week prior.

Despite fixed-income seeing losses this month, Jeff Lipton, managing director of credit research at Oppenheimer, believes "a performance sea change is nearing."

Growing new-issue supply is "adding to bidders' 'wait-and-see' mentality with a variety of credits coming to market at favorable spreads," said FHN Financial's Kim Olsan. Next week's calendar hits $8.4 billion.

Muni yields rose up to eight basis points, depending on the scale, while UST yields rose up to six basis points at 30 years.