We wanted to share our market insights and outlook in light of the extraordinary events of the past few days. The failure and closure of the three US banks, including Silicon Valley Bank (SVB), the second largest bank failure in US history, has weighed heavily on the minds and emotions of investors.

While 2022 was a challenging year, by almost any measure, municipal bonds continued to demonstrate why they are perceived as one of the safest asset classes one can invest in.

The environment that investors have faced throughout 2022 has grown more challenging by the day. Market uncertainty has risen dramatically as a result of the Russian invasion of Ukraine, the threat of an expanding war, the increasing likelihood of severe economic contraction in the US, Europe, and Asia, while the Federal Reserve tightens monetary policy at the fastest cadence in history.

The first four months of 2022 have been the most tumultuous period for investors since the onset of the pandemic in March of 2020. For fixed income markets, it has been the worst start to a year, from a performance perspective, in forty years.

Consistent with the outlook we shared in our most recent market commentary, the US economy is beginning to slow rapidly. The clearest illustration of this can be seen in the -1.4% Q1 GDP growth

Clinton Investment Management CEO Andrew Clinton discusses the outlook for the municipal bond market with Bloomberg’s Taylor Riggs on “Bloomberg Markets: The Close.”

The first four months of 2022 have been the most tumultuous period for investors since the onset of the pandemic in March of 2020. For fixed income markets, it has been the worst start to a year, from a performance perspective, in forty years.

Clinton Investment Management (CIM) has been awarded a PSN Top Guns distinction by Informa Financial Intelligence’s PSN manager database, North America’s longest running database of investment managers.

Through the analysis of this data, one can see that episodes of rising municipal bond yields and corresponding bond price drawdowns are both temporary and self-correcting.