First Half Public Finance Primary Issuance Down 20%, Foreshadows Potential Scarcity of Municipal Investment Options
07/05/2023
Issuance was 20% lower in the first half of 2023 compared to the first six months of 2022.
Activity averaged $29 billion a month, matching our expectation.
Municipal mutual fund flows are turning, tells us municipal investor sentiment is strengthening.
A scarcity of municipal bonds could develop because of the supply and demand dynamic in the near term, and because of federal tax policy in the medium term.
The above dynamic, along with historically attractive municipals yields, reinforces the case we have been making to investors about the appealing nature of the municipal bond market.