How have Hurricanes Harvey, Irma and Maria impacted the municipal bond market?

Affected regions’ long-term outlooks largely depend on initial credit conditions

Time to read: 4 min

The financial impact of 2017’s three devastating hurricanes has varied greatly depending on the region affected. From a credit standpoint, the most important takeaway is that each region’s ability to withstand the financial impact of the storms depends on its credit quality ahead of the storm. This does not bode well for Puerto Rico and the US Virgin Islands, which have been struggling with deteriorating fiscal conditions for some time. On the other hand, Houston and Florida are beginning the rebuilding process from a much stronger economic and financial position. Below we examine the storms’ impact on each affected region.

Continue

Fiscal policy and the muni market: Five areas to watch

We examine the potential effects of Trump’s tax and infrastructure proposals on the muni market

Larosiliere_Stephanie_sm_150dpi_RGBIn recent months, the Trump administration has discussed a number of initiatives that could impact the US municipal market — some potentially adversely. At the top of the list are tax reform and major increases in infrastructure spending. Concern over the impact of these policies — particularly changes in tax exemptions currently enjoyed by US municipal investors — has caused some volatility in municipal bonds since the US election. However, while policy uncertainty remains, Invesco’s municipal bond team believes the US municipal market may offer opportunity in 2017. Below, we assess five likely implications on the municipal market in the coming year and beyond.

Continue