06/14/2024 Market Commentary
Municipal bond yields held steady for much of the week, before rallying on Wednesday following the release of the May CPI Report. The report showed that consumer prices remained flat in May, but increased by 3.3% compared to a year ago. This was slightly below expectations and was cheered by the market as it marked two consecutive months of lower-than-expected CPI reports.
The 10- and 30-year MMD have now seen rates drop by 28 and 23 basis points respectively since peaking on May 30th.
Tax-exempt yields over the past week
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| June 6, 2024 | 2.90% | 3.76% |
| June 13, 2024 | 2.83% | 3.73% |
| Change (bps) | -7 | -3 |
Also on Wednesday was the Federal Open Market Committee Meeting, where the Federal Reserve decided to hold the federal funds rate range between 5.25% and 5.50%. The Fed also officially revised downward their rate cut projections to just one for the year. Both of these actions were expected by the market.
In the post meeting press conference, Fed Chairman Powell reiterated that policymakers would like to see more progress on inflation before cutting interest rates, and that thus far, progress has been made without any major blow to the economy.
Treasury yields have seen rates drop significantly since the end of May with the 10- and 30-Year Treasury now down by 37 and 34 basis points since May 29th.
Treasury yields over the past week:
| 10-Year Treasury | 30-Year Treasury | |
|---|---|---|
| June 6, 2024 | 4.28% | 4.43% |
| June 13, 2024 | 4.24% | 4.40% |
| Change (bps) | -4 | -3 |
Written by Michael Garcia, Associate, Oppenheimer & Co. Inc., Public Finance.
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