Another round of stimulus totaling $1.9 trillion is making its way through the US economy, with hopes it will trigger a sharp rebound from the ravages of COVID-19.
Apart from some high-profile downgrades, the muni credit markets finished 2020 buoyed by breakthrough vaccines and signs that state and local tax collections were better than anticipated.
In coming years, US Congress and the Biden administration could implement spending programs and tax reforms at the national level that trickle down into state and local government policies too. Our Katie Klingensmith joined Muni Bond Team Research Director Jennifer Johnston to discuss the potential implications for the municipal bond market, against a backdrop of COVID-19.
Once upon a time, US municipal bonds were generally considered less risky than corporate bonds. Backed by the full faith and credit of state governments, investors had confidence they would receive their principal plus interest without fail. Times have changed.