Public Finance
2/24/2023 Market Commentary
February 24, 2023
Municipal bonds continue to be under pressure as a result of an overall change in market sentiment. Municipal bond yields had fallen for much of January, but have since been on the rise and are now at their highest levels since the beginning of the year. Since February 2nd, the 10- and 30-Year MMD have risen by 46 and 43 basis points respectively. This week also saw the largest outflows from Municipal bond funds since the first week of January at $1.6 billion.
Tax-exempt yields over the past week
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| February 16, 2023 | 2.44% | 3.46% |
| February 23, 2023 | 2.59% | 3.56% |
| Change (bps) | +15 | +10 |
Treasury yields outperformed Municipals this week, but are still up substantially over the past few weeks. Since February 2nd, the 10- and 30-Year Treasury have risen by 48 and 33 basis points respectively. Recent economic reports continue to contribute to volatility in the Treasury market and investors are increasingly worried about the future pace of rate increases.
Treasury yields over the past week
| 10-Year Treasury | 30-Year Treasury | |
|---|---|---|
| February 16, 2023 | 3.86% | 3.92% |
| February 23, 2023 | 3.88% | 3.88% |
| Change (bps) | +2 | -4 |
Written by Michael Garcia, Associate, Oppenheimer & Co. Inc., Public Finance.
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