Tax Break’s Escape Might Lessen Pressure to Sell: Muni Credit
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For the $3.7 trillion municipal bond market, Washington’s political divide may be a good thing.
The coming year’s congressional elections weaken chances of a far-reaching tax-code overhaul that would roll back the break for buyers of state and local-government debt, said analysts including Morgan Stanley Wealth Management’s John Dillon and Matt Posner, who follows federal policy for Municipal Market Advisors. That may aid a market hit by losses this year as investors pulled out money amid speculation about rising interest rates and mounting distress in governments such as Puerto Rico’s.