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Use these simple visuals to help illustrate technical market perspectives to clients.
Tax-equivalent yields on municipal bonds look attractive
2/27/2025
For your high-income clients, tax-equivalent yields on investment-grade municipal bonds have reached attractive levels.
Key takeaways:
- Although yields on U.S. bonds have edged lower in early 2025, we think that investment-grade municipal bonds remain attractive, particularly for high-income earners.
- For your clients in top tax brackets, investment-grade municipal bonds recently reached a tax-equivalent yield-to-worst of 7.4%, as the chart above illustrates.
- We think this yield looks attractive versus taxable bond yields, especially when considering that approximately 70% of the municipal bonds in the above index are rated either AAA or AA.
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