Municipal Bonds Starts 2021 Strong

The municipal bond market is starting 2021 on a strong note thanks to strong demand, limited supply, and expectations of fiscal relief for state and local governments (Barrons)

New-issue volume so far in 2021 has been about $3 billion, about half the pace of the weekly pace of 2020.

One portfolio manager tells Barron’s that demand is strong as bondholders reinvest Jan. 1 interest payments and as investors anticipate relief from Washington for strapped municipal-bond issuers and the possibility of higher federal income taxes, which would increase the appeal of munis relative to Treasuries and other taxable debt