How low can they go? Municipal bond yields inch down toward record levels

Issuers and buyers will both be watching the direction yields take this week as the 30-year municipal bond slips beneath the 2% threshold and 10-year heads toward record-low territory.

On Monday, the 10-year general obligation on Refinitiv Municipal Market Data’s AAA scale fell to 1.31%, two basis points away from the record low while the 30-year muni yield dropped to 1.97%, four basis points above the record low. The record low yield for the 10-year on MMD’s scale is 1.29%, which was set on June 27, 2016; the record low on the 30-year AAA GO is 1.93%, hit on July 6, 2016.

Writing in a weekly Court Street Group Research market commentary, George Friedlander noted the recent drop in bond yields was due to several factors, such as geo-political factors like Sino-U.S. trade tensions and the weakening of economies around the world.

(Read more: Bond Buyer: Feed)