Will Fiscal and Monetary Policies Make America Reflate Again?
For all the uncertainty about the pandemic, elections, and fiscal support from Washington, the fourth quarter of 2020 saw a liquidity driven rally led by the lowest quality, highest beta parts of the investment grade taxable market. According to Deutsche Bank, 38 of the 39 asset classes it follows were up in the quarter, very much like 4Q19.
In the municipal bond market, the keywords for the quarter were strong demand and not enough supply as investors continued reaching for yield and quality spreads narrowed. State and local governments reaped the benefits of low rates at the moment when they needed money most.
The commentary is the opinion of the subadviser. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.
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Past performance is not indicative of future results.