Municipal bonds saw a significant rally on Monday due to a surge in the US Treasury market following the announcement of Scott Bessent as President-elect Donald Trump’s nominee for Treasury Secretary. Market participants are hopeful that Bessent, a hedge fund manager, will bring a Wall Street perspective to the position.
As a result, benchmark yields for state and local government bonds fell by up to 7 basis points by 4:00 p.m. New York time. Notably, tax-exempt yields on 10-year, top-rated benchmark bonds decreased by 5 basis points, settling at 2.89%. This is approaching the lowest levels seen since late October, indicating a positive environment for municipal bond investors.