Municipal Bond News: Yields Drop, Bond Pricing Levels Out

It seemed like just yesterday the municipal bond news headlines were harping on about rising yields being a sign that certain doom was in store for the municipal bond market. While bond pricing may have moved inversely, dropping to what otherwise could be perceived as more attractive levels, investors weren’t so eager to bite during this brief period of panic. The reason for their reluctance? Investors were lead to believe that the upturn in yields was undoubtedly an indication that the economy was hopelessly stuck in recession, and the popular prophecy of massive bond defaults hitting the nation would soon come to pass.

Municipal Bonds Begin to Rebound in Dramatic Fashion

Fortunately, the authors of these reactionary municipal bond news items (that were in no short supply across the internet) may now have egg on their faces. Municipal bond issuance remains high, as investors have once again retained their confidence and are returning to this tried and true form of debt security investment en masse.

Better still, if you’ve read the latest municipal bond news, you’ll find that yields are now dropping on non-taxable muni bonds while bond pricing has leveled out. In fact, yields are now beginning to reach new record lows. How’s that for a comeback? Despite there being some uncertainty surrounding the market, the attractive bond pricing, tax exempt interest and reliably steady income that come attached with bonds is what has kept investors coming back for more. At this rate, municipal bonds may once again begin to outpace Treasury bonds sales. Considering how difficult it can be to truly profit from playing it safe to the extreme in terms of bond pricing and risk, it’s not hard to imagine frustrated investors are going to further gravitate to the better yields that muni bonds offer.

Munis Stay Solid While Corporate Bonds Suffer

Unsurprisingly, upon reading this latest bit of municipal bond news, investors are indeed moving toward munis, while junk bond sales still continue to suffer, due to higher risk and less economical bond pricing. While munis have taken some flak in the headlines over the past few months, it’s really the corporate bonds that remain in somewhat dire straits, and the investors who haven’t heeded the warning signs may find themselves in hot water. On the other hand, those who methodically research municipal bond pricing and yields online are going to be able to sleep easy at night.