- As we have discussed, MUNIs for September finished strong. Many are calling for the balance of the year to remain firm because most of the record surge in supply is beginning to dry up. We have reported all year about the glut of supply hurting pricing while moving yields up; we are now starting to see a slowdown in the primary markets, which should help pricing. I do not think we will see another 25bps move to the downside this month, but 5-10bps is not out of the question.
- The FED showed a willingness to lower rates further this year, but many have expressed (as we have reported) caution driven by concerns over inflation at their policy gathering last month. Most have judged that it would be appropriate to ease policy further over the remainder of this year, but with the same breath, they expressed concerns over inflation. I suspect, along with others, we will see at least one more move down this year.
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