Munis weaker across the curve; UST sell-off on short end following CPI data

Municipals saw losses across the yield curve, outperforming a U.S. Treasury selloff on the front end of the curve but facing larger losses out long, while equities tumbled following a hotter-than-expected inflation report.

Two- and three-year muni-UST ratios are around 64% to 67%. The five-year was at 69%, the 10-year at 82% and the 30-year at 102%, according to Refinitiv MMD’s 3 p.m. read. ICE Data Services had the five at 71%, the 10 at 86% and the 30 at 100% at a 4 p.m. read.

Muni and UST yields surged Tuesday on expectations the Fed will have to aggressively raise interest rates to bring down inflation, said Scott Anderson, chief economist at Bank of the West.

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