Primary bond market

"The knee-jerk reaction of the markets to the Fed meeting (and press conference) was to sell stocks and bonds, because [Fed] Chairman Jerome Powell said that an additional rate cut in December wasn't a sure thing," said Northlight Asset Management Chief Investment Officer Chris Zaccarelli.

The softer-than-expected September consumer price index report, released Friday, reinforced confidence in the likelihood of a Fed rate cut at its October meeting and potentially at its December meeting, said Tom Kozlik, managing director and head of public policy and municipal strategy at HilltopSecurities.

Illinois' Grand Prairie Water Commission went to market Monday in a debut deal as it builds infrastrcture linking the Joliet area with Chicago's water system.

Issuance is light this week, with $5.367 billion on tap, and it should be "easily distributed," J.P. Morgan strategists said.

"Investors were not disappointed," said John Kerschner, global head of securitized products and portfolio manager at Janus Henderson. "Inflation came in softer than expected, leading to a tepid bond market rally" and ensuring a rate cut at the upcoming Federal Open Market Committee meeting.

"We're not going to be having huge reinvestment months over the next few months, not until the beginning of the year. So we need this flow [of deals] to keep up with demand, and we expect that to continue," said Jennifer Johnston, director of municipal bonds research at Franklin Templeton.

North Carolina's triple-A ratings were affirmed ahead of plans to sell up to $506 million in general obligation and limited obligation bonds.

The tax-exempt market is expected to be "biased higher" in the coming weeks and months as the expected heavy pace of issuance this month will not be as "oppressive" as feared, said Pat Luby, head of municipal strategy at CreditSights.

"I've never seen this level of hand wringing at the issuer level," said Matt Boles, managing director at RBC Capital Markets.

The first part of exclusive research from The Bond Buyer finds that most industry optimists say funding needs will be met sometime after 2035.