Risky Munis Shrug Off Recession in Biggest Rally Since 2009
- High-yield muni bonds have surged 7.8% since start of April
- Federal Reserve’s muni lending program improved sentiment
Construction in Detroit.
Photographer: Emily Elconin/BloombergThis article is for subscribers only.
To judge by the municipal junk-bond market, it would seem like the economic collapse is already over.
High-yield state and local government debt, the most susceptible to defaulting during a sustained slowdown, have returned 7.8% since April 1, putting them on track for the biggest quarterly jump since the end of the Great Recession in 2009.