10/20/2023 Market Commentary
Municipal bond yields were on the rise again this week with the 10- and 30-Year MMD increasing by 23 and 29 basis points, respectively. A “flight to safety” brought rates down last week amid the conflict in the middle east, but high supply in the secondary market has caused yields to tick back up. Municipal bond funds also saw $297 million of outflows, marking the seventh consecutive week of outflows.
Tax-exempt yields over the past week
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| October 12, 2023 | 3.36% | 4.24% |
| October 19, 2023 | 3.59% | 4.53% |
| Change (bps) | +23 | +29 |
Treasury Yields rose sharply this week as Fed Chairman Powell warned that lower economic growth was likely needed in order to bring down inflation to its 2% target rate. The Fed Chairman also commented that he didn’t believe current monetary policy was too restrictive. These comments have contributed to an overall sense among investors that rates will need to stay higher for longer. The 10- and 30-year Treasury ended the week up by 28 and 23 basis points respectively. The 10-year Treasury also briefly crossed 5%, its highest level since 2007.
Treasury yields over the past week
| 10-Year Treasury | 30-Year Treasury | |
|---|---|---|
| October 12, 2023 | 4.71% | 4.87% |
| October 19, 2023 | 4.99% | 5.10% |
| Change (bps) | +28 | +23 |
Written by Michael Garcia, Associate, Oppenheimer & Co. Inc., Public Finance.
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