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The state of the US Economy has been featured more prominently in the news lately due to a recent inversion of the yield curve. An inversion of the yield curve occurs when the 10-Year Treasury yield falls below that of the 2-Year Treasury yield. For investors, this may cause concern as an inverted yield curve can be considered the canary in the coal mine for a future recession. This along with the effects of trade and currency wars, have caused markets to be unusually volatile. Municipal Bonds are debt securities issued by states, cities, townships, counties, or school districts to finance large capital expenditures. These bonds are typically used to finance projects such as the construction of roads, airports, schools, or hospitals. As the owner of a bond, you receive coupon payments twice a year, until the bond matures. For example, if you owned $10,000 worth of a bond that yields 2.5%, you would receive coupons of $125, twice a year. |
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