Short-term interest rates are likely to continue ratcheting down, making it a challenge for state and local financiers to maximize income on investments. But there are a few opportunities here and there.
Barring unknowable virus mutation scenarios, state and local fiscal managers have the opportunity to navigate trends and crosscurrents already underway to make better decisions. One factor figures into almost everything: inflation.
Pending municipal finance provisions in the big spending bills before Congress could benefit issuers, investors and taxpayers. To get the best deal, state and local leaders must press their case immediately.
Going into next year, the Fed is likely to throttle back policies that have kept rates near zero. That presents opportunities — and risks. Nobody wants to repeat the local government fiscal disasters of not so long ago.
The city wants to offer $100 million in pension obligation bonds, a move that both lowers pension debt and increases the funds’ earning power by providing more money to invest. But the sale is considered risky.
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