Monetary policy

"You now have a proven toolbox based on the data from the MSRB municipal trades,” says Brad Wendt of Charles River Associates.

While municipals hit the pause button Friday, the movement in yields in the first week of July marked the largest one-week decline in 2021.

More of the same from the FOMC did little to move UST or munis. ICI reported the 17th consecutive week of inflows at $1.98 billion. July is looking good for municipal issuers.

The Federal Reserve’s tapering of its asset purchases, which he hopes will start “soon,” will run smoother this time around because investors already know that a move is being discussed, said Federal Reserve Bank of Dallas President Robert Kaplan.

Edward Al-Hussainy, senior interest rate and currency analyst at Columbia Threadneedle, will discuss the economy, inflation and the Federal Reserve.

Federal Reserve Gov. Christopher Waller said the better-than-expected performance of the U.S. economy warrants scaling back asset purchases sooner than expected and he favors starting with mortgage-backed securities.

The Federal Reserve might consider an interest-rate hike from near zero as soon as late 2022 as the labor market reaches full employment and inflation is at the central bank’s goal, Federal Reserve Bank of Boston President Eric Rosengren said.

The U.S. economy will likely meet the Federal Reserve’s threshold for tapering its asset purchases sooner than people think, said Dallas Fed President Robert Kaplan, who has penciled in an interest-rate increase next year.

Federal Reserve Bank of Atlanta President Raphael Bostic said the central bank could decide to slow its asset purchases in the next few months and he favored lifting interest rates in 2022 in response to a faster-than expected recovery from COVID-19 pandemic.

Federal Reserve Chair Jerome Powell said the price increases seen in the economy recently are bigger than expected but reiterated that they will likely wane.