Secondary bond market

BlackRock's move comes as money continues to flow out of muni mutual funds into ETFs and SMAs.

Munis continue to outpace USTs as ratios on the front end continue to richen relative to USTs, Jason Wong said.

Muni yields were bumped one to eight basis points, depending on the scale, while UST yields fell three to 10 basis points, with the greatest gains out long.

Tax exemption concerns — though an elimination is unlikely — and the loss of federal stimulus will "most assuredly pull forward delayed issuance, with the first half of 2025 volume to exceed second half volume," said James Welch, a municipal portfolio manager at Principal Asset Management.

To close out the day, USTs remained mixed, with yields rising on the short end and falling out long, while munis were changed up to a basis point, depending on the curve.

Investors added $741.7 million to municipal bond mutual funds in the week ending Wednesday, following $2.078 billion of inflows the prior week, according to LSEG Lipper data.

Even with the possibility of inflation and fiscal policy-induced headwinds, there is much to be optimistic about in the muni market, despite some possible near-term turbulence, said GW&K strategists.

The Fed meets this week, but the probability of another cut at Wednesday's meeting seems low amid elevated inflation and growth data, said Matt Fabian, a partner at Municipal Market Analytics.

Tech stocks suffered on "worries that Beijing is becoming increasingly competitive in the high-stakes artificial intelligence race," said José Torres, senior economist at Interactive Brokers.

Issuance for next week falls to an estimated $5.151 billion, with $3.959 billion of negotiated deals and $1.193 billion of competitive deals on tap.