In 2021, the composition of municipal supply could be a key swing factor for high quality muni performance. Last year, taxable muni supply hit an all-time record of $181 billion, due in no small part to the elimination of tax-exempt advance refundings in the 2017 Tax Cuts and Jobs Act (TCJA). The shrinking supply of tax exempts has provided a tailwind to muni market performance, particularly for high quality tax-exempt munis, which have enjoyed a full recovery to pre-pandemic levels.
Author(s): David Hammer
Publication Date: 19 February 2021
Publication Site: PIMCO