Public Finance Market Comment September 27, 2021

Casy O’Brien, Managing Director // Jock Wright, Managing Director Interest rates moved higher last week following the FED’s tapering announcement. The Federal Reserve most likely will begin tapering asset purchases in December with a November announcement. According to the statement, the FED will remain “accommodative” until it sees a sharp move higher in employment and other economic activity and it is not expected that the FED will raise rates until later in 2022. In other news, China has pumped money into their financial system to help the troubled real estate conglomerate Evergrande. This will be a very important week for financial policy with votes expected for the $3.5 trillion stimulus package as well as the transportation bill. The US debt limit will be reached this week and the clock is ticking on raising the ceiling to avert a government shutdown. Last week, treasuries were higher by 9 basis points in 5 years, higher by 9 basis points in 10 years, and higher by 10 basis point in 30 years. Municipal yields were higher by 2 basis points in 5 years, higher by 2 basis points in 10 years, and higher by 3 basis points in 30 years. Ratios vs. treasuries last week, the five year spot is at 46.3% of treasuries, the ten year spot is at 68.9% of treasuries, and the thirty year spot ended the week at 80.3% of comparable treasuries. This week’s supply totals $11.5 bln with $9.6 bln negotiated and $1.9 bln competitive, slightly higher than last week’s $10.8 bln calendar. U.S. municipal bond funds reported $1.55 bln of net inflows in the week ended September 22nd, compared $1.26 bln of net inflows last week, according to data released by Lipper on Thursday. In short term markets, the SIFMA Index remained unchanged at 0.02% from last week.

KEY INTEREST RATES AAA-RATED GENERAL OBLIGATION TAX-EXEMPT RATES Today Last Week Last Month Last Year 5.00 Rate 9/24/2021 9/17/2021 8/25/2021 9/24/2020 4.00 Federal Funds Rate 0.25 0.25 0.25 0.25 Prime Rate 3.25 3.25 3.25 3.25 3.00 LIBOR (1 month) 0.08 0.08 0.09 0.14 2.00 LIBOR (3 month) 0.13 0.12 0.12 0.23 SIFMA 0.02 0.02 0.02 0.12 1.00 SIFMA/1 M LIBOR % 24.0 24.0 22.8 82.9 0.00 B.B. 20 Bond Index 2.15 2.14 2.14 2.21

B.B. Rev. Index 2.51 2.50 2.50 2.71 1/13 6/13 4/14 9/14 2/15 7/15 5/16 3/17 8/17 1/18 6/18 4/19 9/19 2/20 7/20 5/21 11/13 12/15 10/16 11/18 12/20 30-Day Visible Supply 14.1 B 12.4 B 8.6 B 11.7 B 1 Year MMD 5 Year MMD 10 Year MMD 10-Year MMD 1.00 0.94 0.89 0.83 20 Year MMD 30 Year MMD

GENERAL OBLIGATION TAX-EXEMPT BOND MARKETS Current 1 Month Ago 1 Year Ago AAA Year Tax-Exempt Credit Spreads Tax-Exempt Credit Spreads Tax-Exempt Credit Spreads Tax-Exempt AA A BBB AA A BBB AA A BBB 1 0.11 0.02 0.07 0.22 0.02 0.07 0.25 0.05 0.11 1.03 5 0.44 0.05 0.13 0.33 0.05 0.13 0.36 0.10 0.29 1.21 10 1.00 0.12 0.25 0.57 0.12 0.25 0.59 0.15 0.34 1.31 20 1.39 0.15 0.29 0.58 0.15 0.29 0.58 0.21 0.43 1.43 30 1.59 0.16 0.29 0.58 0.16 0.29 0.58 0.21 0.43 1.43

GENERAL OBLIGATION TAXABLE MARKET Spread to Year Treasury AAA Taxable 65% Taxable LIBOR 70% LIBOR SIFMA AAA Tax-Exempt 1 0.07 0.27 0.18 0.07 0.18 0.13 0.09 5 0.95 1.12 0.73 0.29 1.05 0.73 0.72 10 1.45 1.82 1.18 0.18 1.48 1.04 1.14 20 1.72 2.50 1.63 0.24 1.73 1.21 1.45 30 1.98 2.60 1.69 0.10 1.74 1.22 1.53

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