In normal times, bond markets are typically quieter during the summer months, but this past summer has been like no other. Issuance is up and demand has been steady as investors get more comfortable with credit fundamentals.

It's logical for any reasonable person to conclude that the more debt any person or entity has outstanding in relation to their "income", the higher interest rates for said entity or person would be. More debt equates to more leverage, and, therefore, greater risk. These sorts of axioms hold no truth for the world's largest sovereign debtors, and that includes the United States.

S&P 500 sets a new record high and the Federal Reserve lowers rates for its Municipal Liquidity Facility due to lack of users. Tax-exempt municipal yields have increased slightly in the last few weeks, but remain low for the year.

The U.S. Bureau of Economic Analysis (BEA) released the first estimate for Gross Domestic Product (GDP) for the second quarter late last week. GDP decreased at an annual rate of 32.9% in the second quarter. Economists surveyed predicted an even greater ...

Although the U.S. stock market has been remarkably stable in recent weeks, there are concerns about the impact of the COVID-19 pandemic on the U.S. and world economies. Yields on municipal bonds have declined to historically low levels, and the Municipal Securities Rulemaking Board recently released a research report regarding competitive bidding for municipal securities.

Coming into the third quarter of 2020, the pandemic is still with us, and the Southern and Western U.S. are both experiencing a resurgence of the virus. On a positive note, municipal yields have returned to pre-pandemic levels and have remained steady these past few weeks.

The Fed releases their Monetary Policy Report with early reflections on COVID-19 impacts. Municipal yields remain flat with increasing new issue volume. Municipalities across the country are re-evaluating their capital spending against the new economic backdrop.

Stocks have recovered nearly all of their pandemic-inflicted losses against a backdrop of the first declared recession in the United States in many years and the highest unemployment numbers since the Great Depression. Meanwhile, interest rates have experienced some volatility, but remain near all-time lows.

The news continues to be positive regarding municipal bond yields over the past two weeks. All major rating agencies are making additional inquiries regarding the impact of COVID-19 on the immediate and long-term fiscal health of local governments.

There is still a lot of uncertainty about the long-term impact of the COVID-19 pandemic, but some details are beginning to emerge, including a precedent-setting monthly jobs report and preliminary budget updates from several states.