The Federal Reserve is staying its course – keeping the fed funds rate near zero and continuing its asset purchases at current levels.

The stream of fairly positive economic data was disrupted by the shock of an underwhelming jobs report and a notable uptick in inflation measures. Muni markets have, nevertheless, remained steady.

First release of 2020 Census data and President Biden's proposal to increase the capital gains tax.

This week's commentary looks at the reactions to higher than expected inflation. Municipal yields have remained flat from March into April, and details about the President's 2022 budget outline.

While March was largely a difficult month for bonds, the fixed income markets have stabilized as we head into the second quarter. President Biden announces objectives for an additional large spending bill and introduces dramatic changes to federal tax law.

With the passage of The American Rescue Plan, focus now shifts to future legislative proposals and the possibility of tax increases, in part to address the growing federal deficit. Municipal bond yields have declined modestly over the past two weeks, and several legislative proposals specific to municipal bonds are being supported by local government groups.

As the Senate prepares to move ahead this week with President Biden's economic stimulus/coronavirus relief, anxieties about inflation prompted a bond sell off this past week bringing yields more or less back to where they were a year ago, prompting us to ask two questions: Is higher inflation on the horizon? And will we see more bond-market scares this year?

With consumer sentiment conflicting economists' expectations for 2021, all eyes are on Washington to see how quickly a COVID-19 relief package can stimulate the economy.

Take a look at how U.S. Treasury yields have trended recently, the next proposed Covid-19 relief bill and its potential impacts, recent trends in urban housing and potential impact on municipal budgets.

With the official start of the 117th Congress this week, we highlight some of the legislative proposals in the area of public finance that may be revisited and how they can impact issuers.