Municipal Bonds May Get a Boost From Congress's Final Tax Bill
- Curb on advance refundings could cut issuance by one-quarter
- Corporations may still be buyers, even with big tax cuts
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The final tax bill hashed out by Congress promises to provide a boost to the U.S. state and local government bond market by reducing sales of new tax-exempt debt beginning next year. It could also increase demand for the securities from investors in high-tax states such as California, New York and New Jersey, where residents would be hardest hit by limits on the ability to deduct state and local taxes on their federal returns.
Bond prices were little changed Monday, with the bill largely shaping up as analysts and investors had anticipated. Here’s the major impacts: