Treasury bonds

Democrats on the House Ways and Means Committee announced a new bill that would restore the power of applying tariffs back to Congress amidst accusations of market manipulation and political ineptitude by the Trump administration.

The rising costs of federal debt, an impending budget showdown, and Congressional turmoil is highlighting the complex relationship between Treasury securities and municipal bonds.

Economic forecasts include the possibility of higher inflation and slower growth that could stall future cuts to the federal fund rates.

Taxable munis have returned 1.48% month to date and 0.29% year-to-date while investment-grade munis have seen 0.44% returns so far in March and 0.05% year-to-date. USTs are in the black at 1.43% so far this month but returning -1.76% year-to-date while corporate bonds are returning 1.24% in March but -0.46% year-to-date.

Triple-A scales saw yields rise 10 to 13 basis points following a second day of UST losses as muni investors await a robust new-issue calendar.

Munis saw smaller losses, outperforming a UST sell-off after the employment report came in stronger than expected, leading analysts to suggest Federal Reserve rate cuts may come later than anticipated.

"Despite the breathtaking selloff in longer rates, Barclays' macro strategists see no clear catalyst to stem the bleeding," Barclays strategists said. "Data are unlikely to weaken quickly or enough to help bonds."

There will be "choppiness in the municipal bond market through the end of the year," said Anders S. Persson, Nuveen's chief investment officer for Global Fixed Income, and Daniel J. Close, Nuveen's head of municipals.

"Bearish Treasury moves have kept some pressure on the muni market and prevented an attempt to rally during the summer season when large redemptions trump issuance," BofA Global Research said in a report.