Municipal yields rose up to seven basis points Thursday pushing the one-year triple-A muni to 1%, a level not seen since April 2020 during the initial COVID-led selloff. U.S. Treasuries pared back some losses near the close, but the two-year hit its highest level in over two years after inflation hit its highest in 40. “The bond market seems to foresee more trouble ahead as Treasury rates rose all along the curve,” noted John Farawell, managing director and head of municipal trading at Roosevelt & Cross. “Obviously, all commodities are under pressure with the troubles in Ukraine, especially oil which has a direct effect on the consumers and the economy.” While he expects a 25-basis-point rate hike when the Federal Open Mark Committee meets, Farawell isn’t ruling out a 50-basis-point increase. “This is a new paradigm for the Fed and the administration with so many challenges prevalent.”
Source: The Bond Buyer
