Municipal bonds, or "munis," are having a moment. With interest rates at near-historic lows, investors are thirsty for yield. They're also keen to maximize any tax advantages that might be available to them, following recent changes to the tax code. Munis fit the bill in both cases, as riskier issuers come to market, with lower-rated and higher-yielding bonds.
This is great news for towns, cities and other municipal borrowers, who are able to fund their growth projects. But there are hidden risks for investors and for the wider economy. Marilyn Cohen of Envision Capital Management, Inc., joined us to walk through some of the pitfalls that the muni bond craze might bring.
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