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BlackRock Is Bullish on Muni Bonds Heading Into 2019

  • Shrinking market, Fed pause may boost returns, strategist says
  • Demand may get a boost from new limit on tax deductions
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Sean Carney, head of municipal strategy at BlackRock, looks ahead to 2019 in the municipal bond market. Source: Bloomberg)

The world’s biggest asset manager is a big bull on the $3.8 trillion municipal-bond market.

Sean Carney, managing director and head of state and local government debt strategy at BlackRock Inc., said in an interview that he expects the securities to return as much as 4 or 5 percent in 2019 if the Federal Reserve moves closer to pausing on interest-rate hikes. That compares with a 0.7 percent return this year, when rising rates weighed on bond prices, according to Bloomberg Barclays indexes.