Morgan Stanley predicts benchmark yields on 10-year Treasuries will hit 3.3% in the fourth quarter as the economy improves. Consequently, Zezas warns that munis can experience a 1% loss over the next three quarters.
“As the economy transitions to a higher growth channel, we expect some more pain from rising rates before valuations become attractive,” Zezas added.
iShares National AMT-Free Muni Bond ETF
For more information on the munis market, visit our municipal bonds category.
Max Chen contributed to this article.