Primary bond market

The final new issues of the week close with some bumps in repricings while the secondary was quiet.

Triple-A benchmark yields moved higher by as much as five basis points while ICI reported another $1.8 billion of inflows and ETFs increase their share by $841 million.

A volatile U.S. Treasury market and month-end positioning are pressuring municipal yield curves.

John Hallacy, founder of John Hallacy Consulting LLC, talks with Chip Barnett about the pandemic’s lingering credit impacts on state finances in a wide-ranging discussion of the many issues affecting the municipal market today. (17 minutes)

The Federal Reserve must be prepared to move if inflation continues to surprise to the upside, according to one Fed president, while another again stated a desire for the Fed to pull back on its accommodation.

The short end of the yield curve faced pressure from a cheaper UST five-year. As the flattening trend in UST takes hold, demand for duration will also spill over into the tax-exempt space, with long-dated munis continuing to outperform, analysts say.

Refinitiv Lipper's $1.85 billion of inflows say investors aren't going anywhere.

The Investment Company Institute on Wednesday reported $2.533 billion of inflows into municipal bond mutual funds, the highest since February.

If the market holds, the state could also receive the lowest recorded true interest cost in its history of general obligation bond sales.

Tuesday’s data may not be indicative of where the economy is going and will likely be written off by the Federal Open Market Committee at its meeting, analysts say.