Dreyfus' latest "Tax Exempt Money Market Commentary," written by Director of Tax-​Exempt Money Market Fund Strategies Colleen Meehan, tells us, "This has been an interesting December in the tax-​exempt market. The normally quiet year-​end for new issuance was shaken as issuers rushed to market ahead of the potential tax overhaul which would inhibit many traditional financing vehicles in this sector of the fixed income market. This has put pressure on yields on the front end as longer fund managers purchased newly issued longer-​dated securities and sold securities in the front end to pay for them. This has provided us with opportunities ahead of the potential dearth of new supply as we enter the new year. The municipal yield curve has continued to flatten due to the market technicals. The Securities Industry and Financial Markets Association (​SIFMA) Index has moved higher ahead of the FOMC meeting and increased long-​term issuance. Demand continues to remain strong as funds are maintaining shorter weighted-​average maturities given the relatively flat yield curve and expected higher short-​term interest rates. The SIFMA Index is a weekly high grade market index comprised of seven-​day tax-​exempt variable-​rate demand notes produced by Bloomberg LLP. Careful and well-​researched credit selection remains crucial. Certain state general obligation bonds, essential service revenue bonds issued by water, sewer and electric enterprises, select local credits with strong financial positions and stable tax bases, and various health care and education issuers will remain securities with low credit risk."

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