16-05-2025
Untouched Muni Tax Perk Eases Urge to Flood the Market
Municipal bond investors likely felt relief this week when a draft tax bill didn't erase the all-important tax exemption, but that respite may cool this year's market for state and local governments seeking cash.
Most muni bonds pay interest that's exempt from federal taxes, a perk that entices investors without raising an issuer's borrowing costs. Public finance groups had feared the removal of the exemption would be looked at as a way to help fund President Donald Trump's tax cuts, but with the pressure off for now, Barclays municipal strategist Mikhail Foux said municipalities may push back plans for bond sales.
