Insights Addressing Municipal Market Volatility

Mar 23, 2020
Highlights
  • Similar to the previous week, last week’s municipal bond volatility remained heightened, and the asset class sold off.
  • The leverage squeeze from the week before sparked more forced selling throughout the week.
  • This coincided with normal seasonality in resets, pushing funding costs up significantly.
  • We continue to believe that this dislocation will prove to be temporary, not structural.
  • Bessemer's high-quality muni bias and Treasury position helped to mitigate the volatility.
  • As the volatility subsides, Bessemer will look to capitalize on attractive muni valuations.

About the Author

Kevin Akinskas
Managing Director and Head of Municipal Bonds
In this role, Kevin leverages the firm’s best thinking and works collaboratively with a team of highly experienced analysts and researchers to manage our municipal bond strategy and offering.