- Many are indicating the MUNI bond market will be set for a record supply next year. I have seen as much as 600B predicted in 2026, which is up 4% YOY. Refunding volume and taxable issuance are expected to remain flat at approximately $112 billion and $36 billion, respectively. Taxable MUNIs could offer you an opportunity to buy quality paper in your tax-deferred accounts while picking up yield and safety. Reinvestment volume is expected to be around 59% of the total supply for 2026; therefore, it will hinge on the economy and rate reductions for 2026 to push yields lower, and supply will not help.
- During the Mayor-elect Mamdani, he promised free childcare and buses, 200K of new units of affordable housing, and city-owned grocery stores, all funded by raising taxes on corporations and the wealthy or borrowing. These pledges, which created the win for him, will face, in our opinion and others, new fiscal financial issues. If you are buying NYC paper, be aware of the structure and how they are paid.
To continue to receive timely information on bond markets, Sign up here for the free DRL Muni Market Insider.
