Here's Why Munis Will Be Back in Vogue Next Year

The video discusses the potential revival of the municipal bond market in 2023, driven by factors such as stabilizing interest rates and favorable supply-demand dynamics. Cooper Howard from the Schwab Center for Financial Research highlights the high credit quality of municipal bonds and the reduced risk of defaults. The discussion also covers the risks associated with high yield muni bonds and identifies the transportation sector as a promising area for investment due to improving economic conditions and reduced COVID-19 risks.

What is one reason Cooper Howard believes municipal bonds will be back in vogue in 2023?

• There will be a high need for borrowing by state and local governments.

• The Federal Reserve will decrease interest rates significantly.

• Rising interest rates will be a major headwind.

• Supply and demand dynamics will favor increased demand.

According to Cooper Howard, what has contributed to the high credit quality in the municipal bond market?

• High default rates in the municipal bond market.

• Lack of economic recovery.

• Increased state and local government revenues.

• Decreased fiscal aid to municipalities.

Why does Cooper Howard advise against going all in on high-yield municipal bonds?

• They are often unrated and riskier.

• They offer better diversification than equity markets.

• They are less risky than investment-grade bonds.

• They have very low default rates.

Which sector does Cooper Howard identify as having potential opportunities in 2023?

• Healthcare

• Transportation

• Technology

• Real Estate

What factor is contributing to the potential opportunities in the transportation sector?

• Increased work-from-home trends.

• Decreased airline travel.

• High risk of credit quality concerns.

• Return to pre-COVID normalcy.