Jack Muller on higher yields, a steeper curve, record supply, and where municipal credit is starting to diverge.
The price of money has changed—and for municipal investors, that may be the most important story of the fall.
In this episode, host Eric Kazatsky is joined by Jack Muller, Investment Strategist at MacKay Municipal Managers, to connect the dots between Treasuries, munis, supply, and the Fed. They discuss why the Fed no longer tells the whole rate story, what the Treasury's expanded buyback activity can—and can't—do for the long end, and why higher muni yields reflect the macro backdrop rather than credit deterioration. Jack breaks down a steeper curve that finally pays investors to extend, a record year of issuance that demand keeps absorbing, and the "Rubicon moment" that brings crossover buyers into the tax-exempt market. They close with the growing dispersion in municipal credit—upgrades in Illinois and New Jersey, pressure on local governments, school districts, higher education, and healthcare—and what persistent volatility means from here.
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MacKay Municipal Managers is a team of portfolio managers at MacKay Shields. MacKay Shields is 100% owned by NYLIM Holdings, which is wholly owned by New York Life Insurance Company. “New York Life Investments” is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.
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