Weekly Fixed Income Update
Interest rates, inflation, central bank action—all these and more can impact fixed income. Stay on top of the market with our weekly update.
September 4, 2024
Macro update
Last week the economic calendar was notable with Personal Consumption Expenditures (PCE) data leading the way. Core month-over-month PCE came in at 0.2%, as expected. Core year-over-year PCE—the Fed’s preferred inflation metric—now stands at 2.6% (Bloomberg, 9/3/2024).
Second-quarter GDP saw its second revision last week, with growth numbers revised upwards to 3% from 2.8% (Bloomberg, 9/3/2024).
All eyes this week are on Friday’s payroll numbers. Current expectations are for an increase in non-farm payrolls of 165,000 from August. This is the last jobs reading before the Fed’s next meeting. An unexpectedly strong or weak jobs number may affect the Fed’s decision regarding the overnight interest rate (Bloomberg, 9/3/2024).
Fixed Income Five by Kevin Lynyak
Municipal bond update
Benchmark AAA municipal yields finished last week little changed, with only slight weakness toward the back end of the curve. Both two- and five-year yields were unchanged, while 10- and 30-year yields rose by just two and three basis points (bps), respectively. AAA-rated benchmark tax-exempt yields now stand between 14 and 43 bps higher than at the start of the year (Refinitiv MMD, 8/30/2024).
The Bloomberg Municipal Bond Index gained 0.02% last week, outperforming Treasurys and strengthening year-to-date (YTD) performance to 1.3%. The Bloomberg US Treasury Index lost 0.52%, leaving YTD performance at 2.6% (Bloomberg, 8/30/2024).
Muni relative value has been rising in recent weeks because of muni price increases lagging behind Treasurys. Ten-year muni relative value compared with 10-year Treasurys now sits at 69%, just shy of the YTD high (Refinitive MMD, 8/30/2024).
Five-, 10- and 15-year A-rated municipal yields were 2.6%, 3.05% and 3.39%, respectively, as of the August 30 close. Related taxable-equivalent yields were 4.39%, 5.15% and 5.73%, respectively, assuming the highest combined federal tax rate of 40.8% (Refinitiv MMD, Parametric, 8/30/2024).
Mutual fund flows were positive for the ninth consecutive week, at $1 billion, with an even split between open-end fund and ETF contributions (JPMorgan, 8/28/2024).
Corporate bond update
US investment-grade (IG) corporate yields were higher across the curve last week. Two-year yields were one bp higher, while five- and 10-year yields increased eight and nine bps, respectively. Corporate yields are lower across the curve YTD, with two-, five- and 10-year yields down 33, 14 and four bps, respectively (Bloomberg, 8/30/2024).
The ICE BofA 1–10 Year US Corporate Index returned -0.18% for the week and 1.27% on a month-to-date (MTD) basis. The index outperformed like-duration Treasurys during the week by 0.08% and by 0.13 MTD (Bloomberg, 8/30/2024).
Corporate-only funds experienced inflows of $1.3 billion following the previous week’s inflows of $1.3 billion (JPMorgan, 8/30/2024).
Investing in fixed income securities involves risk. All investments are subject to loss. Learn more.
![Fixed income banner](/-/media/images/fixed-income-commentary-page/fi-commentary-spotlight-banners-fi-gradient.png?h=400&iar=0&w=1440&hash=167B8D419D38A97405EDF2C7A960EC1F)
![Corporate bond market insight banner](/-/media/images/fixed-income-commentary-page/fi-commentary-spotlight-banners-corp-bmi-gradient.png?h=400&iar=0&w=1440&hash=C9F4D8D0A82E8FCA43B3F10FDAEDA4D0)
![Municipal bond market insight banner](/-/media/images/fixed-income-commentary-page/fi-commentary-spotlight-banners-muni-bmi-gradient.png?h=400&iar=0&w=1440&hash=5C8EADEF3D4C16F9F928462C3CBEE4F4)
![](/-/media/images/inflation/laddered-interest-rate-scenario-tool-image.png)
ADVISOR TOOL
Laddered Interest Rate Scenario Tool
Capture the performance of your laddered municipal or corporate bond portfolio in changing rate environments.
Get in touch
Discover how our fixed income solutions can address today’s challenges. Request a sample portfolio or transition analysis.