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Credit Is Back on the Muni Market Radar
Triet Nguyen quoted in Bond Buyer on muni credit trends and why credit risk is again a concern.
DPC DATA’s Triet Nguyen was quoted in a March 20 Bond Buyer article by Caitlin Devlin covering the March 20th Bond Dealers of America Muni Bond Market Structure Conference in Chicago. Nguyen was part of a panel on data, pricing, and transparency in muni trading.
This event is the only conference of the year dedicated to muni market business conditions and outlook, covering market structure, regulation, and key federal policy and legislative developments.
In the article, Devlin reported on a key theme from the panel discussion: as post-pandemic federal stimulus fades, credit concerns may take on a larger role in how market participants evaluate risk and manage portfolios.
Nguyen’s quote captured that shift clearly: “We’ve been in a fairly benign credit environment in the last few years, and that’s allowed a lot of issuers to withstand volatility. That tailwind is about to go away. So we believe that fundamental credit concerns are about to come back as an essential component of your trading and management strategy.”
The federal government allocated roughly $4.6 trillion under six pandemic laws passed in 2020 and 2021, including the prominent $350 billion State and Local Fiscal Recovery Funds, the key account for pandemic relief for cities, counties, and states.
As one buy-side panelist said, “Our market was then at $4 trillion. So do the math, that’s way too much stimulus that came into the market.”
The article also noted that panelists pointed to a widening gap between stronger and weaker issuers, pressure on local governments as support recedes, and the possibility that reduced federal funding could lead to more new-money issuance in 2026 and beyond.
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