top of page
Writer's pictureErik T. Long

Muni-Bond Moves by the Fed


The U.S. Federal Reserve stands ready to consider further intervention in the municipal bond market, which is not “necessarily out of the woods” after recovering from unprecedented volatility arising from the coronavirus pandemic, a Fed official said on Monday. A selling frenzy by virus-rattled investors in the $3.8 trillion market where states, cities, schools and other issuers sell debt sent yields skyrocketing in March. Moves by the Fed to aid short-term debt markets, as well as a loan program for states and eligible local governments facing a cash crunch, helped restore calm.

“My job and our team’s job is to monitor the market and if additional intervention is required, the Fed’s prepared to consider it,” Kent Hiteshew, a former muni banker and U.S. Treasury official who joined the Fed’s financial stability division in March, said at the Brookings Institution’s municipal finance conference.


Hiteshew said the municipal liquidity facility (MLF), which the Fed authorized in April, was designed as a backstop for the market, allowing governments to access short-term, cash-flow loans from the Fed.


5 views0 comments

Recent Posts

See All

Good News On the Jobs Front

This jobs number should ease some recession fears, although next weeks CPI will be a key indicator as we all know. Payrolls were up...

More Products to Manage Risk

It is incredible the products the CME Group keep developing to efficiently manage risk. Coming in October they will be releasing products...

Comments


bottom of page