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Muni Bonds Close Worst Quarter Since 1980s Down More Than 6%

  • Rising rates increase chance of further short-term decline
  • Some analysts see potential for pickup in demand on valuations
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Mui: Equity Markets Look Compancent Vs Bonds

The municipal-bond market is ending its worst quarter in about 40 years with a 6.4% loss, a dramatic pullback for an asset class that investors favor for its stability.

The loss so far this year is in line with bonds globally as central banks increase interest rates to combat the fastest inflation in decades. The municipal market is still underperforming U.S. Treasuries, heightening investor concern.