Here's Why Municipal Bonds Are Rallying

The video discusses the performance and dynamics of municipal bonds, highlighting their recent rally and outperforming corporate bonds. It explores the supply and demand factors affecting muni bonds, with a focus on the lack of primary supply and the resulting demand. The discussion includes predictions for future performance, particularly the impact of low issuance. The video also covers the performance of investment-grade bonds, with examples from Illinois and Chicago, and addresses the risks associated with high yield muni bonds, especially during the pandemic.

What is one reason for the recent rally in municipal bonds?

• Increased corporate bond issuance

• Decreased investor interest

• Easing inflation pressures

• High default rates

Why is the municipal bond rally expected to continue?

• Increased primary supply

• High default rates

• Lack of new issuance

• Decreased investor interest

Which municipalities have shown surprising upgrades this year?

• Illinois and Chicago

• Philadelphia and Chester

• New York and Los Angeles

• Detroit and Puerto Rico

What is a significant risk associated with high-yield municipal bonds?

• Frequent defaults in senior living centers

• Excessive government regulation

• Lack of investor interest

• High interest rates

During the pandemic, which area of high-yield munis saw significant defaults?

• Real estate

• Government bonds

• Senior living centers

• Corporate bonds