Health Crisis Abates, Market Normalizing, & Watching Credit Quality

  • It appears as though the worst of the health crisis could be behind us, but uncertainty remains about how and when the country will open for business.

  • The U.S. Labor Department reported Thursday, April 16 that weekly jobless claims were 5.245 million. This raises the loss of jobs to 22 million in recent weeks.

  • The Federal Reserve has offered only bits of updated information about the $500 billion Municipal Liquidity Facility announced last week. House Financial Services Committee Chair Maxine Waters wrote a letter to the Fed asking the program be expanded.

  • State and local government credit quality is evolving, mostly lower. We cite the Center on Budget and Policy Priorities forecasts and cite examples such as California, Illinois, and New Jersey.

  • After six weeks of outflows, demand finally returned to the municipal bond market as $833 million flowed into municipal bond mutual funds per Lipper.

  • The municipal bond market is continuing to normalize. Municipal Market Data (MMD) benchmark yields were mostly unchanged this week, and the negotiated calendar not only was absorbed by investors, we saw incidents where issues were upsized.

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