BUT CONDITION OF CAPITAL MARKETS CONTINUES ON ROAD TO IMPROVEMENT
The general condition of our capital markets continues to improve, with risk premiums for financial assets declining since the most-challenged days of the financial crisis.
Concerns remain, however, such as the “shape” of the economic recovery, the pace and impact of the collective governments’ exit strategies from accommodative fiscal and monetary policies, and the impact on the U.S. dollar resulting from growing fiscal challenges.
One of the more interesting take-aways from the graphs shown below is the collapse of the spread between AAA-rated tax-exempt debt and U.S. Treasuries. A year ago, AAA-rated tax-exempt bonds traded nearly 200 basis points (bps) above Treasuries and the now trade “through” Treasuries.
The full content of this article is only available to paid subscribers. If you are an active subscriber, please log in. To subscribe, please click here: SUBSCRIBE
Comments are closed, but trackbacks and pingbacks are open.