Munis' ‘Frenetic' Trading Pace Smashes Record

Core Insights - The city of Chicago is currently in its budget season, with a proposal to cease direct purchases of treasuries, despite not holding any currently [2][3] - The proposal requires city council approval, and there is skepticism among aldermen regarding its prudence, with some labeling it as reckless [3] - The performance of treasuries has outpaced the portfolio's returns last year, raising questions about the rationale behind excluding them [4] Muni Market Activity - Muni trading is experiencing record volumes this year, with significant trading activity noted in April, described as frenetic [5][6] - The record trading volume is attributed to a substantial increase in state and local debt sales, leading to heightened trading activity among investors and dealers [6] - Demand for munis has rebounded, with inflows into the market totaling approximately $41 billion, particularly towards ETFs focused on munis [8] Future Expectations - Expectations for 2026 indicate that supply will continue to be robust, with projections for another record year in terms of supply, contributing to ongoing active trading [9]