A Huge Promotion from Congress for Munis?

Although I can’t say how long this rally will last, the drivers for the $3.7 trillion muni market remain the same now compared to a year ago: stock market volatility; a thirst for tax-free income and capital preservation; and a need for safety in a world beset by perceived threats, from geopolitical uncertainty in the European Union to the upcoming U.S. presidential election, the most divisive and controversial in modern history.

And it isn’t just American investors who favor munis. With government debt still yielding negative rates in Japan, Germany, Switzerland and elsewhere, foreign investors continue to add to their muni holdings, even though they’re ineligible to receive the securities’ U.S. tax benefit.

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