{"id":551748,"date":"2026-03-29T05:07:07","date_gmt":"2026-03-29T05:07:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/551748\/"},"modified":"2026-03-29T05:07:07","modified_gmt":"2026-03-29T05:07:07","slug":"mayor-mamdanis-budget-mess-is-creating-chaos-in-the-nyc-bond-market","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/551748\/","title":{"rendered":"Mayor Mamdani\u2019s budget mess is creating chaos in the NYC bond market"},"content":{"rendered":"

New York City\u2019s bonds<\/a> have suddenly become a hot topic on Wall Street \u2014 and you can thank socialist Mayor Zohran Mamdani<\/a> for this certifiably \u00adbizarre development.<\/p>\n

This past week, the Big Apple went to investors to sell billions of dollars in municipal debt. <\/p>\n

With Mamdani doing his best imitation of Fidel Castro, the city sold $2.3 billion \u2014 $300 million less than it had targeted.<\/p>\n

Mind you, I\u2019ve been covering NYC bond deals for decades. <\/p>\n

For the most part, they\u2019ve been what you might call boring \u2014 in a good way. <\/p>\n

Even back under Mayor David Dinkins, when the city was reeling from the aftershocks of the 1987 stock market crash \u2014 not to mention Dinkins\u2019 own spending largesse \u2014 the city\u2019s bond sales remained mostly strong.<\/p>\n

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

Once the fiscal crisis of the 1970s and our near-default subsided in the minds of investors, NYC bond issues have frequently been \u201coversubscribed,\u201d which in Wall Street lingo means there are more buyers than bonds available at auction.<\/p>\n

That\u2019s because of the heavy city and state tax burden and how city debt provides significant yields that are triple tax-free, and not least, the protections provided by something called the Financial Emergency Act of 1975, the state law designed to make sure that what went down in the 1970s never happens again.<\/p>\n

The fact that the city had to scale back the latest bond issue because of the weakened demand indicates a particular investor animus to what Mamdani is doing, according to well-placed investors.<\/p>\n

One broker who deals with super-rich people looking for tax breaks in municipal debt says many of his clients are staying away from NYC debt<\/a> \u2014 simply because they don\u2019t trust Mamdani.<\/p>\n

\u201cI\u2019ve had clients that are selling them and others who don\u2019t want to own them,\u201d he said. <\/p>\n

\u201cThat\u2019s \u00adunusual because taxes might be \u00adgoing up. I don\u2019t think they\u2019re going to default, but it\u2019s been difficult to make the sale.\u201d<\/p>\n

You wouldn\u2019t know any of this based on the spin from the city and its bond underwriters on Wall Street.<\/p>\n

Given the trauma the Iran conflict has produced in global markets, particularly the bond market off of which NYC debt is priced, the sale went swimmingly, they claimed.<\/p>\n

Signal of confidence?<\/p>\n

The \u201csteady demand for the City\u2019s municipal bonds in the face of market volatility is a clear signal of confidence from investors who know that our credit is strong,\u201d city Comptroller Mark Levine said in a statement, according to Bloomberg<\/a>. <\/p>\n

(A City Hall rep didn\u2019t return a request for comment.)<\/p>\n

Reality check: First, the city paid higher interest rates on those bonds than it did not too long ago, meaning it\u2019s getting increasingly expensive to sell debt, when it used to be a cakewalk.<\/p>\n

Recall that the state fiscal-crisis law, which provided significant safeguards for city bonds in good times and bad, was created when bankruptcy was looming and NYC couldn\u2019t sell bonds for infrastructure; and cops were being laid off as were city workers.<\/p>\n

The Emergency Act created a mechanism where investors wouldn\u2019t be afraid to buy our debt because they received first dibs on city tax revenues. <\/p>\n

That\u2019s one reason Mamdani, for all his self-inflicted governing nuttiness, is still able to tap Wall Street when he needs to.<\/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 you believe the city will never default given the above, its bonds might seem like a good place to park money. <\/p>\n

During times of fiscal distress when yields (their implied interest rates) rise and prices fall, you can make a few bucks rolling the dice on Mamdani.<\/p>\n

But that gamble is growing increasingly dicey now that we have an avowed socialist for a mayor with plans to tax and spend the city into oblivion. <\/p>\n

It\u2019s also why rating agencies that grade city debt are increasingly worried that Mamdani\u2019s budgeting won\u2019t work. <\/p>\n

Three agencies recently revised their outlook on the city\u2019s debt to \u201cnegative\u201d from \u201cstable.\u201d<\/p>\n

And it\u2019s why even the city comptroller is worried about Mamdani\u2019s decision to raid rainy-day funds to try to get a balanced budget, which he must under the Financial Emergency Act<\/a>. <\/p>\n

If he ends the year with a deficit of just $100 million, Mamdani faces a state takeover of the city\u2019s finances.<\/p>\n

In other words, the city will be run out of Albany.<\/p>\n

Mamdani wants to raise taxes, but a growing chorus of Dems, the governor included, know it\u2019s like pushing on a string; people leave, as they have been doing, meaning there are fewer taxpayers to tax while the welfare rolls grow.<\/p>\n

Then there\u2019s the obvious incompetence coming from City Hall. It projected a 15% increase in Wall Street bonuses to pay for the mayor\u2019s $127 billion budget but instead bonuses grew 9% from 2024. <\/p>\n

With the likes of JPMorgan and Goldman Sachs doing more hiring in places like Texas (which has no income tax) and low-taxed Utah, you can see how even that healthy increase will decline in the budget cycles ahead.<\/p>\n

Put it all together and you can say there were buyers of city debt, but the reality is they\u2019re demanding more for their money because they\u2019re getting nervous \u2014 which they have every right to be.<\/p>\n","protected":false},"excerpt":{"rendered":"New York City\u2019s bonds have suddenly become a hot topic on Wall Street \u2014 and you can thank…\n","protected":false},"author":2,"featured_media":551749,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28,61453,222855,3673,918,10766],"class_list":{"0":"post-551748","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-city-hall","10":"tag-david-dinkins","11":"tag-fidel-castro","12":"tag-wall-street","13":"tag-zohran-mamdani"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/551748","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=551748"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/551748\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/551749"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=551748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=551748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=551748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}