Following a reconciliation of the variant bills behind closed doors, final tax reform legislation has been delivered and will very likely make its way to the president’s desk before the end of the week. We’ve kept score, assessing the likely impact on the muni market, from tax cuts to the reduction of state and local tax deductions.

What’s the most important response for a muni investor? Make sure your manager has the flexibility to invest dynamically as conditions change. The ability to use taxable bonds opportunistically can help preserve capital during volatile periods. Above all, don’t be passive.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.

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