NY Federal Reserve muni specialist keeping eye on ESG, looking for market intel

Bonds

In his new role as a municipal market specialist at the Federal Reserve Bank of New York, Timothy Little said he’s focused on gathering market intelligence from as broad a range of municipal market participants as possible and is keeping a particular eye on ESG bonds.

Little gave an overview Monday at the Government Finance Officers Association’s Debt Committee winter meeting of his new position as the New York Fed’s senior analyst for municipal markets and public finance. He works within the FRBNY’s Markets Group, the largest group at FRBNY responsible for monitoring and analyzing all global capital markets on behalf of the Fed.

Timothy Little, municipal market specialist within the Markets Group at the Federal Reserve Bank of New York, said he’s focused on gathering market intelligence from different market participants.

Little joined the Fed in May 2021 after nearly eight years as a public finance analyst at S&P Global Ratings.

“My primary role is analyzing information and getting as much information as I can from as diverse a group of participants as I can to inform the Federal Reserve’s mission,” Little said, adding that most of his work will be internal and not publicly published. “The municipal market is quite broad and diverse and the segments it covers are quite significant, so trying to get as many perspectives as possible is challenging but the GFOA is helpful.”

Little said he’s paying particular attention to environmental, social and governance bonds, which are attracting lots of attention in all markets, he said.

“You couldn’t go to a conference 10 years ago and not hear about pensions, now you can’t go without hearing about ESG,” Little said.

ESG-related topics he’s monitoring include bond labeling, disclosure, asset pricing, and short- and long-term risks around ESG. “How do ESG investors consider the municipal market, now and in the future, are important questions I’m thinking about,” Little said.

When asked by a GFOA debt committee member what the fed would do with the intelligence he gathers, Little said most of it would part of broad market analysis that helps inform policy.

Committee members asked him about the Municipal Liquidity Facility, the tool the NY Fed implemented in 2020 amid pandemic-induced market turmoil to grant distressed muni issuers access capital that expired at the end of 2020.

Little said only that the fed’s researchers are monitoring ongoing comments about the MLF and have published a few papers assessing its role.

On the topic of the phase-out of LIBOR, Little said so far, the transition hasn’t appeared to rattle the muni market. “I think that, given all the communication that’s been done around that, that things have been going well.”

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