“The muni market is on fire,” Ashton Goodfield, head of municipal bonds at DWS, said on Thursday, noting that tax-exempt valuations versus taxable alternatives have been holding near record lows. Goodfield said investors have built cash balances over the last year as demand for income was high and interest paid on cash investment was near zero. In addition, other supporting factors are the high credit quality nature of the muni market, recently buffeted by fiscal support, as well as the demand for tax-exempt income at the same time the notion that tax rates for wealthy individuals could increase during the current administration. There seems to be no end in sight to the healthy demand for municipal bonds in the primary market as evidenced by recent and new fund flows, agreed a New York manager of underwriting and trading.
Source: Bond Buyer.
