Washington

Tax-exempt money market funds reached a 2024 high of assets under management at $136.84 billion for the week ending Wednesday, according to the Investment Company Institute.

Lawyers are beginning to flesh out what the specifics of what a second Trump administration may look like, and what we can expect before Biden passes the baton.

"A sharply lower new-issuance calendar, peak yields, large redemption money and mutual funds inflows are all positive performance factors for the market," BofA strategists said.

Despite the post-election selloff, inflows continued this week as LSEG Lipper reported investors added $1.263 billion to municipal bond mutual funds for the week ending Wednesday, compared to $658.5 million of inflows the prior week. High-yield inflows returned.

Unless the state government makes changes to taxes or spending, there will be deficits of $587 million to more than $800 million starting in the next fiscal year.

"If the GOP wins the House, the specter of risk to the municipal bond tax-exemption will increase," said Edwin Oswald, a tax partner at Orrick Herrington & Sutcliffe in Washington D.C.

With the rollout of a new final EPA rule, Midwest municipalities are seeking ways to finance lead pipe replacement efforts, including through revenue bonds.

It was still unclear early Wednesday whether Democrats would take control of the House.

While this meeting is a slam dunk, the election and data makes the December meeting more of a question, some analysts said.

Potential new Senate Finance Committee Chair Sen. Mike Crapo, R-Idaho, has suggested a potential workaround to offset the cost of extending the Tax Cuts and Jobs Act.