2021 Mid-Year Market Insights Update

Resilience

Consistent with MacKay Municipal Managers’ forecast in our 2021 Insights, the municipal market demonstrated significant resilience in the first half of 2021 reinforcing its historic adaptability. Through the first six months of the year, the Biden Administration’s policy agenda began to materialize resulting in a large stimulus package.

This coupled with domestic improvements related to the COVID-19 pandemic, vaccine developments and efficacy improved the nation’s economic outlook. Better than expected tax revenues boosted further by the economic stimulus has strengthened credit fundamentals within the municipal market.

The 2021 MacKay Municipal Managers™ theme of “resiliency” speaks to the essentiality of the municipal market, the reliability of sustained revenue streams, and the market’s ability to withstand and adjust to the unexpected.

1. Source: ICE DATA, as of 12/2020 – Comparing yield to worst divided by modified duration to worst for the ICE BofA Broad US Taxable Municipal Securities Index and the ICE BofA US Corporate Index over the last 10 years.

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Past performance is not indicative of future results.

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