Capital Ideas Podcast
What’s the state of the states?
Apr 25, 2024
Capital Group fixed income portfolio manager Lee Chu discusses the impact of pandemic-era stimulus drying up on municipal bond investing, potential election impacts, complexities of municipal bond market, and insights on opportunities and challenges in the market.
23:52
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Quick takeaways
- Post-stimulus, state financial health hinges on efficient fund management.
- Upcoming elections will impact municipal issuers with shifting tax policies and market reactions.
Deep dives
State of State Finances Pre-Pandemic and Post-Stimulus
Before the pandemic, state and local finances varied greatly, with entities like Chicago and Illinois struggling until federal stimulus arrived. The American Rescue Plan Act provided significant funds, boosting income and sales taxes and leading to healthier fiscal positions. Today, state reserves and rainy day funds are at all-time highs, setting states on a stronger fiscal footing.
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