Weekly Municipal Monitor: New York Ends Impasse

Municipals outperformed Treasuries last week amid record low consumer sentiment and strong job growth. New York finally reached a FY2027 budget agreement, which Western Asset believes supports the attractive relative value of NY municipal bonds.

Key Takeaways

• 1.Municipals posted positive returns and outperformed Treasuries last week as demand conditions improved despite elevated supply.
• 2.New York State reached a $268 billion FY2027 budget agreement, including a new graduated second-home tax for properties over $5 million.
• 3.Western Asset views New York municipal securities as offering attractive relative value due to higher average yields and favorable taxable-equivalent yields.

Table of Contents

• Macros, Markets and Munis
• Demand Improved as Supply Continues to Build
• This Week in Munis: New York Ends Impasse
• Municipal Credit Curves and Relative Value
• Western Asset Key Themes for Muni Investors

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