KEY TAKEAWAY Municipal bond valuation has varied over the past three rate hike cycles, but the combination of attractive valuations and a still favorable supply-demand balance should help support prices against the prospect of additional rate hikes. Click here to download a PDF of this report. FED RATE HIKE PLAYBOOK: PART 2 In Part 2…

The origin of high-yield weakness has come from the lowest-rated tiers of the high-yield market but has infected the broader market.

High valuations, steady economic growth, and the lingering threat of Fed rate hikes may keep pressure on bond prices in 2016.

Both the pace of rate hikes and ultimate resting spot for the fed funds rate greatly influence how quickly, and by how much, yields may ultimately rise.

More expensive valuations and lower yields may slow the pace of municipal bond performance.