We do not expect the municipal bond market
to repeat first half strength over the second
half of 2014.
A gradual rise in yields to compensate for
better growth, a modest rise in inflation, and
the start of Fed rate hikes in roughly one
year’s time will likely pressure bond prices
slightly lower through year end.
We continue to believe the taxable bond
market is likely the main catalyst to the next
move in municipal bond prices.