Salient to Investors:

  • Adam Buchanan at Ziegler said the muni supply and the other rate pressures will have an effect, and buyers will try to get better rates.
  • Lipper US Fund Flows data show that individuals have poured $8.3 billion into muni mutual funds in 2014, the most since 2012.
  • Phil Fischer at Bank of America said that if we get a sustained period of issuance at this level, then we may see weakening in prices – there is an underlying demand for infrastructure that must be met.
  • Michael Zezas at Morgan Stanley said supply alone is unlikely to raise yields because of the inflows into mutual funds, and interest rates tend to move in fits and starts – at some point there will be a more disorderly move in rates and then munis will underperform.

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