Munis’ Worst Annual Start Since 2001 Imperils ‘January Effect’
- Market’s 10-year average January return, 0.9%, trails only May
- Fed throws ‘monkey wrench’ into January dynamic: Lanouette
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The municipal-bond market’s worst start to a year since at least 2001 is marking a major departure from what has historically been a period of strength for the securities.
State and local debt has sold off along with the rest of the bond market in the early days of 2022, losing 0.7% last week, according to Bloomberg indexes. That comes as traders are absorbing the possibility that the Federal Reserve will start hiking interest rates as soon as March amid elevated inflation.