08/23/2024 Market Commentary
Municipal bond yields held steady this week as the municipal market saw another $12 billion of supply. Bond volume has been elevated all year and it is expected to remain so through at least the next two months as issuers seek to bring deals to market sooner and avoid any market volatility associated with the election in November.
Municipal bond mutual funds also continued to see inflows this week, with investors adding another $500.4 million to municipal bond funds.
Tax-exempt yields over the past week
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| August 15, 2024 | 2.71% | 3.59% |
| August 22, 2024 | 2.71% | 3.59% |
| Change (bps) | +0 | +0 |
The minutes from last month’s Federal Reserve meeting were released this week and showed that policymakers were largely supportive of cutting interest rates at the next Fed meeting in September. The minutes have solidified the view among investors that interest rate cuts are coming. The debate is now about not when, but by how much will the Fed cut rates in September and throughout the looming easing cycle.
Looking forward to Friday, all eyes will be on Fed Chairman Powell as he speaks at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming. Investors will be looking for clues regarding Fed policy going forward.
Treasury yields over the past week:
| 10-Year Treasury | 30-Year Treasury | |
|---|---|---|
| August 15, 2024 | 3.93% | 4.19% |
| August 22, 2024 | 3.86% | 4.13% |
| Change (bps) | -7 | -6 |
Written by Michael Garcia, Associate, Oppenheimer & Co. Inc., Public Finance.
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