4.15.25 Treasury Market Volatility's Impact on the Muni Market
It was quite the week in the Treasury market last week, which was influenced by multiple factors: sticky inflation expectations, the Federal Reserve's (Fed) patient stance, rumors of foreign buyer boycotts, hedge fund deleveraging, portfolio rebalancing from bonds to cash, and overall Treasury market illiquidity. The situation was exacerbated by a notably weak 3-year Treasury auction, where the Treasury Department had to offer higher yields to attract demand — which still fell short of expectations. At its peak, the 10-year Treasury yield surged by over 0.70% last week before partially recovering to end the week "only" 0.6
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