Insights

Influences spanning government, regulatory and trade policy, market technicals and sector fundamentals shaped the municipal bond market through June 2025.

Municipal bond investors would be remiss to ignore the impact of state and local taxes on an appropriate mix of in- and out-of-state bonds in their portfolios.

We see the Energy Supply Financing Ratio as an emerging and potentially important signal of how financial institutions are navigating the low-carbon transition.

U.S. Treasury Curve: Treasury yields fell in June and steepened for the quarter, with yields falling in the 1- to 10-year range and increasing beyond 10 years.

Tight credit spreads, solid demand, stable credit fundamentals, and tariff-related uncertainty drive a modest overweight to corporate bonds.

We believe payout ratio is a critical metric in evaluating dividend-paying securities and avoiding the potential pitfalls associated with targeting solely high dividend yield.

We believe that investors may place too much emphasis on high absolute dividend yield when seeking defensive and high income-generating equity exposure.

Uncertainty around fiscal deficits and trade policy dampened demand for Treasury bonds in May.