This month, the Federal Open Market Committee (FOMC) held the target rate steady while long term US treasury rates declined, resulting in an inverted curve. Additionally, there are increasing probabilities in the futures market for multiple decreases in the target fed fund rate before the end of the year. Credit spreads on investment grade bonds rated A or better remained relatively unchanged despite decreasing rates. However, the spread between the BBB municipal general obligation curve and the A municipal curve widened by over 24 basis points across the curve, indicating possible increasing credit spreads.
US Treasury Yield Curve
Our Municipal Market Update is data-driven, one page sheet that is intended to give you an overview of key interest rates – both floating and swap-to-fixed as well as the credit spreads of key local and state entities with data as of January 31, 2020. It is written for those making credit and investment related decisions for municipalities and non-profit institutions. If you have additional questions or would like to learn more about our municipal advisory and investment banking services, visit our Municipal Advisory page and contact Michael Stone, CFA.
Click here to access our Municipal Market Update.