- Loomis Sayles expects markets could experience an uptick in policy-related volatility.
- Municipal market participants skeptically await critical components of the bipartisan infrastructure plan and reconciliation package, as direct subsidy Build American Bonds (BABs) and restoration of tax-exempt advance refunding could expand municipal issuance and offer supply relief.
- Although Covid-19 variants pose a threat to straight line recovery in sectors like airports and toll roads, recovery-related trends point to improvement as companies want to see clients in person and metro areas continue to return to the office.
- Fundamentals of state and local issuers appear solid, with considerable aid by American Rescue Plan funding.
- Against a backdrop of continuing, though somewhat slowed economic expansion due to supply chain disruptions, the team’s outlook trends toward moderately higher interest rates and a somewhat steeper yield curve.