Bond Buyer Review

Rising interest rates tops list of muni concerns in 2022

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By Jessica LernerJanuary 11, 2022, 10:36 a.m. EST 5 Min Read

Major challenges for the public finance industry abound but rising interest rates is the largest concern for business in 202, market participants said in a Bond Buyer/Arizent Research survey. Nearly 60% of respondents said rising interest rates are their biggest worry, followed by regulatory requirements or changes at 45% and a lack of face-to-face communication and market volatility at 37% and 36%, respectively. Ongoing threats from the coronavirus, inflation and legislative inertia on muni issues in Washington, among other factors, also led a majority of those in municipal finance to believe a full economic recovery won’t be reached until at least July. Thirty-five percent of respondents said they believe a full economic recovery will happen in the second half of 2022, while 40% said they don’t believe it will happen until 2023. Fifteen percent believe it will occur during the first half of this year, and 10% believe the economy has already recovered. Rising rates “We've had an unprecedented era of low rates," said Stephen Akin, founder of Akin Investment, a registered investment advisor. "Inflation really could get away from the Federal Reserve; it's not out of the realm of possibility. https://www.akininvestment.com/post/preparing-for-liftoff

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Looking back it is plain to see that the number one concern for markets this year was in fact rising rates and inflation as suggested in the January 11, 2022 issue of Bond Buyer.

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Here's a great take on the dollar from Tom McClellan

The US Dollar Index is climbing up to its highest levels now since 2002, which is getting a lot of currency traders excited. U.S. manufacturers are a lot less excited, because a more valuable dollar makes it harder to sell products overseas.

This rise in the dollar is arriving despite the Fed being behind the curve on getting short term interest rates up to where they should be. Low interest rates mean you get less return for keeping your wealth parked in dollars. But everything is... Read More