When Rates Rise, Munis Win Race While Cash Sleeps

From blog.alliancebernstein.com

Worried about rising rates? Taking your money out of the municipal market and putting it in cash could cost you. From January 1995 through June 2021, Treasury rates rose more than half a percentage point over a two-month period at a frequency of nearly 9%. An increase of more than 0.4% occurred at a frequency of 13%. Unfortunately for investors, it’s hard to predict exactly when those rate rises will occur. Nonetheless, we compared how an investor who timed a move to cash just right would have done during those periods when the 10-year Treasury yield rose more than 0.4% in two months. At first, the cash investor ... (full story)