10/27/2023 Market Commentary
Municipal bonds underperformed Treasuries this week with the 10- and 30-year MMD holding steady compared to last week. This week also saw investors continue to withdraw money from Municipal bond funds. $935 million of outflows were reported for the week ending Wednesday. This marks the eighth consecutive week of outflows.
Tax-exempt yields over the past week
| 10-Year MMD | 30-Year MMD | |
|---|---|---|
| October 19, 2023 | 3.59% | 4.53% |
| October 26, 2023 | 3.59% | 4.57% |
| Change (bps) | +0 | +4 |
Treasury yields remained volatile this week and fluctuated by as much as 15 basis points before ending the week lower. Various recently released economic reports contributed to the volatility, including exceptionally strong GDP numbers reported on Thursday. Third quarter GDP estimates showed that the economy grew at an annualized rate of 4.9%, the fastest rate of growth in over 2 years.
The market is now shifting its attention to next week’s November 1st Federal Reserve meeting, where the Fed is largely expected to hold rates steady. Most important to investors may be Fed Chairman Powell’s comments during his post meeting press conference. Investors will be looking for signals regarding the Fed’s direction and plans for their next policy meeting on December 13th.
Treasury yields over the past week
| 10-Year Treasury | 30-Year Treasury | |
|---|---|---|
| October 19, 2023 | 4.99% | 5.10% |
| October 26, 2023 | 4.87% | 5.00% |
| Change (bps) | -14 | -10 |
Written by Michael Garcia, Associate, Oppenheimer & Co. Inc., Public Finance.
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