Still Waiting on Congress, Looking for State and Local Government Stimulus

03/24/2020

  • There have been a total of 51,678 coronavirus cases reported in the U.S., 667 deaths, and 368 recoveries to date;

  • Congress is still working out the details of the $2+ trillion CARES Act stimulus package (there may be an agreement by the time this commentary is published);

  • We are looking for state and local government stimulus to be included in CARES, and discuss the 2009 Recovery Act as a recent comparison;

  • State and local governments could experience “material credit damage” as it relates to rising public pension net liabilities as a result of recent asset losses...that is, if those losses do not quickly reverse, wrote Moody’s Investor Service;

  • We have been following the municipal VRDO market dislocation closely and saw today that pricings are still reflecting market pressures; and

  • AAA MMD yields fell today, potentially because of market engagement.

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