The Tax-Exempt Train Rolls On

A powerful force is propping up munis in 2021: U.S. prosperity.

municipal bonds written on small blackboard
(Image credit: Getty Images)

The obvious source for positive returns in bonds during 2021's robust economic recovery is high-yield, or junk, a category always known to piggyback on rollicking growth and booming oil prices.

But as usual, and despite the uptick in interest rates and all the apprehensions that inflation is about to stay stubbornly higher, tax-exempt bonds are also in the green. I like to say municipals are steely stuff. I am on the verge of upgrading them to titanium.

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.