The tax-exempt bond market has been, and continues to be, extremely volatile. From one week to the next, borrowers may find that the indicative savings on their upcoming current refunding have diminished, or their estimated par amount for new money projects has increased beyond their expectations. Due to interest rate

Updated: May 15   Yield Curve Normalization and Refunding Escrows The yield curve has significantly normalized in the past several months. We’ve discussed how the shape of the yield curve can impact reinvestment decisions in previous articles (such as “The Slope of the Yield Curve and How it Affects Refunding Escrows”) and now, as

Updated: May 15   As widely anticipated, the Federal Reserve cut interest rates by 25 bps on Wednesday, lowering the Fed Funds target range to 4.25 – 4.50%. The projections released for 2025 indicate only two additional rate cuts in 2025. This is lower than the projections released in September which

Updated: May 15  The Fed decreased interest rates by 25 basis points at this month’s FOMC meeting. Despite this reduction to short-term rates, longer term treasury rates have risen ~17 basis points since November 4th – in large part due to market reactions to the results of the 2024 Presidential

Updated: May 15   The Federal Reserve cut interest rates by 50 bps at this month’s FOMC meeting. Many of our clients have asked us about the market implications following interest rate changes made by the Fed. Similar to the interest rate increases we’ve seen in recent years, this rate cut

Markets reacted strongly in the past week following the July non-farm payroll report coming out lower than expected, along with an increase in the unemployment rate. As a result, treasury rates fell rapidly. In the past week, treasury rates decreased ~26-32 basis points in the 1-3 year range and 6-15

Based on the Federal Reserve sentiments and economic data from mid-June, the market is still expecting to see at least one Fed Fund rate cut before the end of the year. The inverted treasury yield curve, combined with the lower than average tax-exempt to taxable ratios, continues to present an

CPI data came out higher than anticipated this month, a signal to investors and market participants that the Fed may not be ready to cut rates just yet. The probability of a rate cut in June is currently ~11.3%, while it had been ~50% earlier this month. This suggests that

Based on the Federal Reserve’s sentiments and economic data, the market is still expecting to see fed fund rate cuts this year – with fed fund futures pricing in 3-4 cuts before 2025. The inverted treasury yield curve, combined with the lower-than-average tax-exempt to taxable ratios, continues to present an

While the term “normal yield curve” refers to a positively sloping yield curve, the marketplace has become accustomed to an inverted yield curve for quite some time. The treasury curve, from the 6-month to 30-year point, has been inverted since September 2022. We’ve seen this create a benefit for issuers