What are the historical rates of municipal bonds?
Municipal bond rates have varied over the years. For instance, in the 1980s, rates were significantly higher, often exceeding 10%. More recently, rates have been lower, averaging around 2-4%.
Can you provide a specific example from the last decade?
Sure! In 2020, the average yield on 10-year municipal bonds was around 1.2%, reflecting the low interest rate environment.
How do these rates compare to treasury bonds?
Municipal bonds typically offer lower yields than treasury bonds due to their tax-exempt status. For example, in 2021, 10-year treasuries yielded about 1.5%.
What factors influence these rates?
Several factors influence municipal bond rates, including interest rates set by the Federal Reserve, economic conditions, and the credit ratings of the issuing municipalities.
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