Market strong for municipal bonds
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Market strong for municipal bonds
TEXT OF STORY
Doug Krizner: Local governments have been borrowing money furiously. New data shows municipal bonds are on track for a record year. Marketplace’s Amy Scott reports.
Amy Scott: So far this year, state and local governments have sold more than $366 billion in bonds. Research firm Thomson Financial says that’s about 22 percent more than this time last year.
Analyst Art Hogan follows the bond market for brokerage firm Jeffries & Company. He says governments are issuing bonds because they need more money.
Art Hogan: We’ve got bridges collapsing, we’ve got schools that need to be built.
And it’s been a good time to borrow.
Marilyn Cohen manages bond portfolios for Envision Capital Management. She says earlier this year, bond issuers rushed to take advantage of low interest rates, in case the Federal Reserve started raising the cost of borrowing.
Marilyn Cohen: Everybody wanted to squeeze through the door, because they want to lock in, you know, the lowest yields that they have to pay investors as soon as possible.
Now that the Fed has cut interest rates twice in the last two months, Cohen expects the bond deals to keep coming. These days, she says, there are plenty of buyers looking for stable investments.
In New York, I’m Amy Scott for Marketplace.
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