Public Finance
6/23/2023 Market Commentary
June 23, 2023
Municipal bond yields continued to see very little movement this week, with the 10- and 30-year MMD each down by 2 basis points. In fact, maturities beyond 10 years have been steady all month, trading within 4 basis points since June 1st. This week also saw investors add about $672 million to municipal bond funds. The gain follows last week’s outflow of $256 million.
Tax-exempt yields over the past week
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| June 15, 2023 | 2.57% | 3.50% |
| June 22, 2023 | 2.55% | 3.48% |
| Change (bps) | -2 | -2 |
Fed Chairman Powell addressed Congress this week and stated that more interest rate hikes may be needed to curb inflation. Fed Governor Michelle Bowman echoed those comments, suggesting that the Central Bank has still not reached the end of its tightening cycle. Treasury yields rose as a result, with the short end of the curve rising by as much as 15 basis points. Investors are now increasing their expectations for a possible 25 basis point rate hike at the Federal Reserve’s next meeting in July.
Treasury yields over the past week
| 10-Year Treasury | 30-Year Treasury | |
|---|---|---|
| June 15, 2023 | 3.73% | 3.85% |
| June 22, 2023 | 3.80% | 3.88% |
| Change (bps) | +7 | +3 |
Written by Michael Garcia, Associate, Oppenheimer & Co. Inc., Public Finance.
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