Movers to Watch in Fixed Income as Tech Leads Equity Euphoria

• Loads of labor data this week (JOLTS, Non-Farm Payrolls) could move Treasury yields; stabilization expected, potentially leading to an extended Fed hold.
• Municipal bonds still look attractive on a tax-equivalent yield basis for investors in taxable accounts and higher tax brackets, with credit quality remaining strong.
• The biggest variable to the outlook is the inflation forecast, heavily influenced by the situation in Iran and oil prices, which could put a floor on and potentially increase longer-term yields.

Cooper Howard discusses the upcoming labor market data, including JOLTS and Non-Farm Payrolls, anticipating stabilization that could lead to a prolonged Federal Reserve pause. He highlights municipal bonds as an attractive fixed income opportunity, especially for investors in higher tax brackets, due to favorable after-tax yields and strong credit quality. The outlook for inflation, particularly influenced by the situation in Iran and oil prices, is identified as the biggest variable for longer-term treasury yields.