President Trump’s call for $1 trillion in infrastructure spending could swell the nation’s municipal bond supply, for example, while the possibility of lower corporate tax rates could reduce the appetites of banksbr and insurers, which now own about 30 percent of muni bonds.br While a sharp rate spike would cause bond prices to suffer bigger losses, Christopher Ryon, municipal bond manager at Thornburg Investment Management, notedbr that “we are not in a situation where rates are going to take off.” (Bond prices and bond yields move in opposite directions.br Yet, Mr. Hayes said, “There’s also the possibilitybr that the ability of corporations to deduct corporate bond interest goes away.” That would lead to less issuance of corporate bonds — and that could increase demand for muni bonds.br That works out to a 3.73 percent taxable equivalent yield for someone in a 33-percent federal income tax bracketbr As for eliminating the exemption for interest income, changing it would affect thousands of municipalitiesbr that rely on muni bonds to finance their public works.