The volatility since the Federal Reserve stepped in and insured Silicon Valley Bank depositors on March 10 is almost unprecedented. Tax-free AAA bond yields were also lower but didn’t display the volatility we had in U.S. Treasury bonds. The bond volatility of late March requires some salient points regarding future developments. Municipal issuers are also afraid to come to market with the volatility present in the Treasury market. Our thoughts are that the Treasury market, for now, is signaling a slowdown and a slower pace and more nuanced Federal Reserve consideration of rate hikes.

Source: The Herald April 10, 2023 22:03 UTC