{"id":163659,"date":"2026-03-15T01:45:07","date_gmt":"2026-03-15T01:45:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/163659\/"},"modified":"2026-03-15T01:45:07","modified_gmt":"2026-03-15T01:45:07","slug":"mamdanis-tax-spend-plans-leave-nyc-bond-investors-leery","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/163659\/","title":{"rendered":"Mamdani\u2019s tax-&-spend plans leave NYC bond investors leery"},"content":{"rendered":"

At the start of his term in January, Mayor Mamdani had the Big Apple\u2019s lenders in his corner \u2014 despite his plans to remake the Big Apple economy<\/a> under his socialist agenda.<\/p>\n

Now that appears to be changing fast, as municipal bond investors have begun to sell New York City debt, with prices falling and interest rates \u2014 the so-called yields \u2014 spiking to their highest levels in months.<\/p>\n

To be sure, lots of factors are at play here, not least the Iran war that\u2019s hitting bonds across the board. <\/p>\n

But there\u2019s also an unmistakable worry about Mamdani\u2019s plans to unleash spending and raise taxes, which could spur yet more jobs and taxpayers to flee Gotham and the Empire State.<\/p>\n

Investors in NYC bonds aren\u2019t likely to be big supporters of socialism, of course. <\/p>\n

Theirs is a financial incentive: If you live in NYC and are among those who hold the roughly $100 billion (and growing) in city debt, your returns are triple tax-free.<\/p>\n

\t\t\tMore From\t\t\t\t\t\t\tCharles Gasparino<\/p>\n

That means NYC munis are a good place to shelter income \u2014 not just from rapacious tax men at the federal and state level, but also from Mamdani. <\/p>\n

Right now, the mayor is scrambling to make sure he has a balanced budget \u2014 as he is required to have by law \u2014 while handing out all the free stuff he promised when he convinced 50.78% of voters to select him in November.<\/p>\n

Early support<\/p>\n

For most of the first weeks of his term, Mamdani had the municipal bond market in his corner; the more he spent, the more it seemed that muni bond investors \u2014 the vast majority of them high earners \u2014 would plow their money into NYC General Obligation (GO) debt and something called Transitional Finance Authority debt to reap some tax-free income.<\/p>\n

Until now, that is. <\/p>\n

Late this past week, Moody\u2019s Ratings said it could soon downgrade the city\u2019s bond rating from its current, modestly strong AA level. <\/p>\n

Since the end of February, GO yields have spiked 17% (prices fall when yields rise) while transitional bond yields have risen 16% over that time.<\/p>\n

How low will the bond ratings<\/a> go is unclear, but the action coincided with that decline in bond prices and higher yields, meaning it will cost more for the city to borrow in the future. <\/p>\n

\t\t\t\t\t\t\tCharlie Gasparino has his finger on the pulse of where business, politics and finance meet\t\t\t\t\t\t<\/p>\n

\n\t\t\t\t\t\t\tSign up to receive On The Money by Charlie Gasparino in your inbox every Thursday.\t\t\t\t\t\t<\/p>\n

\t\t\t\t\t\tThanks for signing up!\n\t\t\t\t<\/p>\n

If those bond holders who remain in Mamdani\u2019s corner get skittish, those costs will grow even more.<\/p>\n

And there\u2019s a good chance they will. Moody\u2019s cited \u201cthe emergence of sizable and persistent projected budget gaps that signal underlying structural imbalance and reduced financial flexibility, despite New York City\u2019s still-favorable economic conditions.\u201d<\/p>\n

Even our lefty controller, Brad Lander, usually a cheerleader for Mamdani\u2019s leftward lurch, seemed shaken, calling it a \u201csobering wake-up call about the fiscal challenges ahead for us.\u201d<\/p>\n

Lander noted that Moody\u2019s action was \u201cthe first negative outlook the City has received since the COVID crisis,\u201d which shut down vast swaths of the Big Apple economy.<\/p>\n

The city, we should point out, was then being run by Comrade Bill de Blasio, himself out of his depth on spending matters. <\/p>\n

But the state was also run with a relatively steady hand by then-Gov. Andrew Cuomo. <\/p>\n

What we have today in Mamdani is de Blasio on steroids: A 34-year-old neophyte politician and former rapper who made a name for himself in the New York Assembly touting Marxism.<\/p>\n

Hochul out of her depth<\/p>\n

Gov. Hochul<\/a>, meanwhile, seems out of her depth in keeping Mamdani\u2019s weird impulses in check. <\/p>\n

New Yorkers rich enough to stay might be hanging tough; but like those who aren\u2019t lucky enough to leave, they also are forced to deal with the crime and garbage piling up while Mamdani tries to figure out ways to pay for all the socialism he\u2019s promised.<\/p>\n

For many investors, all this drama might not seem like such a bad thing \u2014 just hold, clip your coupons and forget Mamdani\u2019s idiocy. <\/p>\n

If bond prices go down, buy more and get better returns, but \u2014 and this is a big but \u2014 that game works only if you can hold your debt until maturity. It also doesn\u2019t work if Mamdani drives the city into bankruptcy.<\/p>\n

That\u2019s where bond holders often get \u201cscalped\u201d \u2014 Wall Street-speak for not getting repaid by the debtor.<\/p>\n

There\u2019s also the growing danger of NYC taxpayers getting scalped given the huge amount of debt outstanding. <\/p>\n

Servicing or paying those bonds is getting expensive, around 10% of the budget and growing given Mamdani\u2019s spending plans, which will cost a lot more if the yields on NYC bonds continue to spike.<\/p>\n

Bottom line: Getting a break on taxes is looking like a bigger headache than ever for New Yorkers \u2014 whether it\u2019s with their accountant or their bond broker. <\/p>\n

We\u2019ll just have to see how many call it quits and pack up for Florida.<\/p>\n","protected":false},"excerpt":{"rendered":"At the start of his term in January, Mayor Mamdani had the Big Apple\u2019s lenders in his corner…\n","protected":false},"author":2,"featured_media":163660,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[80,9894,18800,8069,288,8411,20601,426,9,24,56,63,65,64,4952,2780,3417,82],"class_list":["post-163659","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york-city","tag-andrew-cuomo","tag-bill-de-blasio","tag-bonds","tag-brad-lander","tag-business","tag-debt","tag-interest-rates","tag-kathy-hochul","tag-new-york","tag-new-york-city","tag-ny","tag-nyc","tag-nyc-headlines","tag-nyc-news","tag-stock-market","tag-taxes","tag-wall-street","tag-zohran-mamdani"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/163659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=163659"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/163659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/163660"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=163659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=163659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=163659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}