The municipal bond market’s sharp rally in 2014 reflects a strong decline in Treasury yields, where the 10-year and 30-year yield was off 18 and 19 basis points over the same period, notes Citi in its recent research report.
George Friedlander and team at Citi Research believe there has been at least a bit of a “January effect” pattern behind the solid performance.
Munis’ recent rally
The Citi analysts note that since year-end, the municipal bond market has rallied with 10-year triple-A yields down 16 basis points and 30-year yields down 26 basis points. The following table captures the municipal bond’s changes since year-end:
The analysts point out...
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