Municipal Market Update – October 2019

During October, the Fed set the target Fed Funds rate to 1.5% to 1.75%, marking the third quarter-point rate cut this year. Despite pressure, the Fed has signaled that they would not be decreasing the target rate further during 2019, although futures markets indicate there is a 70% chance of a cut in the next year.  There was a downward shift in the BBB curve over the month, decreasing the spread on BBB to A by 0.28% on the short end and 0.17% on the long end. There were minimal changes in the swap curve and a further flattening of the US Treasury curve as it adjusted to Fed Fund rate changes.

 

Local Bond Yield: Spread to AAA

 

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 October 31, 2019. It is written for those making credit and investment related decisions for municipalities and on-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.