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Journal Article
How COVID-19 Has Affected the Municipal Bond Market
Between increased spending related to COVID-19, a delayed tax-filing deadline and lack of liquidity, March was a challenging month for the municipal bond market.
Journal Article
Understanding the Recent Rise in Municipal Bond Yields
In late March, investors sold off municipal bonds at a rapid pace, depressing municipal bond prices and driving up their yields relative to U.S. Treasuries. We find that this initial investor run on the municipal bond market was likely due to increased liquidity demand rather than credit concerns, making the Federal Reserve’s early actions to relieve liquidity stress effective. Going forward, however, municipal bond prices will likely reflect increased credit concerns.