Municipal yields are plummeting for a second straight day, with midday AAA benchmark reads showing declines of 50 to 60 basis points as the market rebounds from the massive coronavirus-led selloff of the last two weeks.
The municipal market has navigated massive swings in yields moving up and down over the course of a 12-day period that have become a part of a new dynamic since the coronavirus pandemic hit the U.S. But it appears that the market is accepting the Fed is here to help and buyers are back.
The massive stimulus package expected to be signed into law as soon as the House passes it, likely Friday, could spur the Federal Reserve to begin to buy longer-dated municipals.
(Read more: The Bond Buyer)
