Washington

A downgrade would reverberate throughout the municipal bond market.

The Investment Company Institute reported investors pulled another $137 million out of municipal bond mutual funds in the week ending May 17, after $290 million of outflows the previous week.

New York City is keeping a wary eye on Congress as it considers whether to pause a refunding deal set for next week.

Weakening revenues should be a red flag for states, particularly those planning tax cuts, said Lucy Dadayan of the Urban Institute's Tax Policy Center.

The new law's uncertain impact on cities and states has been a hot topic at the GFOA's annual conference this week.

"If the banking stresses start to bring inflation down for us, then maybe we're getting closer to being done. I just don't know right now," said Federal Reserve Bank of Minneapolis President Neel Kashkari.

When it comes to federal funds flowing to cities and states, top issues to watch are a potential claw back of stimulus aid, fresh infrastructure fund opportunities and guidance on first-of-its-kind tax credits.

The bank-qualified cap is a muni priority that could appeal to lawmakers from less populous areas, as it impacts exclusively small issuers.

The exemption, which has been recently enforced by the Securities and Exchange Commission for the first time, will likely force some underwriters to opt out of it for fear of enforcement.

As GFOA's new president, she intends to work to address staffing shortages and bring GFOA members together.