Municipal bond prices plateaued this summer after a year of slow and steady ascension, but that does not mean the good times are over for this go-to asset class, said Sean Carney, Head of Municipal Strategy within BlackRock's Global Fixed Income Group (BLK) . 'The last couple of months have been more reliant on the income carry component of total return than the price appreciation,' said Carney. 'We don't think it is going to come to an end. It could slow down as we head into year end and the technicals of the muni market turn a bit less favorable than they were during the summer months.' Carney points out that muni market has produced 14 consecutive months of positive performance, the longest streak on record. He said the impressive performance is aided by record fund flows and a fundamental backdrop that supports municipal credit. Finally, Carney said all the talk about 'crumbling infrastructure' coming from both sides of the presidential campaign could eventually be a positive for the muni bond market. 'A bit more new money would be healthy for the muni market,' said Carney. 'We could see an uptick in new issuance. Initially it may weigh on performance but in the end it would be good for these issuers.'
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