, Columnist
Lowest Muni Bond Yields Aided Covid-19 Recovery
State and local governments can reap the benefits just when they need money most.
Keeping cities up and running.
Photographer: Angus Mordant/Bloomberg
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When the coronavirus pandemic struck the U.S. in early March, among the first reported casualties was the $3.9 trillion market for states and local governments.
The yield on municipal debt sold by almost 2,000 borrowers with more than 55,000 outstanding securities hovered at 1.14%, the lowest since at least 1979, when the Bloomberg Barclays U.S. Municipal Index began compiling data. But panic suddenly seized investors, and prices suffered their biggest weekly decline in 33 years, with insurers MBIA Inc. and Assured Guaranty losing more than a quarter of their value.