May 4, 2021
Jennifer Johnston, head of municipal Bond Research at Franklin Templeton, laid the details of what exactly the Biden Administration’s infrastructure plan means for the muni market. First, regardless of what tax plan gets passed, tax raises are almost an inevitability in order to finance larger spending packages, and muni’s tax-exempt status will be critical to mitigating this new tax burden. Additionally, Johnston downplayed the role of inflation concerns for the muni market and signaled that the worst of the muni performance is primarily behind the muni market. Finally, Johnston argued that infrastructure spending will lead to higher property tax revenue and security in the muni market.
(Washington)
FINSUM + Magnifi: Plain and simple, as taxes increase the value of tax-protected assets become more valuable. The muni market is relatively strong and the infrastructure package will not only make munis more secure but more valuable as well.
Other news today: Biden Admin Coming After Gig Economy and Alternative Investing: The Best Places to Invest in Residential Real Estate
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