Campaign Contagion and the Muni Bond Market


Muni Bond Market Agnostic to Election Year Rhetoric:

Presidential elections showcase numerous policy change proposals that have little impact on the municipal bond market. Issuance, mutual fund flows and municipal/Treasury yield ratios have historically not reacted to political rhetoric. A Merrill Lynch study going back twenty years and covering five elections corroborates, finding no clear trend in municipal market activity during the periods leading up to a presidential election.1 In this market update we take a brief look at front runner Democratic candidate Hillary Clinton’s and presumptive Republican nominee Donald Trump’s campaign proposals that could have contrasting implications for the municipal bond market, post-election.

1Source: Bank of America Merrill Lynch report March 2016

Download PDF for full article

Share This Page