Forget Bitcoin or Tesla. Muni Bonds Are the King of Costly.
State and local debt has become arguably the most expensive asset class anywhere.
Local debt takes the crown.
Photographer: Anders Wiklund/AFP/Getty Images
Believe it or not, the $3.9 trillion municipal-bond market and Bitcoin have much in common.
A flood of money pouring in? Check: Muni bond funds added about $2 billion in the week ended Feb. 17, according to Refinitiv Lipper US Fund Flows data, building upon a $2.6 billion inflow in the prior period that was the fourth-largest on record. Scarce supply? You bet: Some analysts estimate that states and cities in 2021 will bring to market the smallest amount of tax-exempt bonds in 21 years. Fiscal stimulus supporting its case? Indeed: The prospect of $350 billion in aid to state and local governments should help stave off any widespread credit stress.