As Washington, D.C., plans revenue bonds, analysts focus on strengths

By: Robert Slavin

Excerpt from the article:

(July 16, 2026) Trump's shrinking the federal workforce hit the district's economy and finances. D.C. lost 72,000 federal jobs in 2025, according to The Washington Post. 

The area's federal employment is at a 25-year low, according to the Economic Policy Institute.

"The shrinkage of the federal government caused Moody's to downgrade D.C. from AAA to Aa1 [in April 2025]," said John Mousseau, executive vice president and chief investment officer at Cumberland Advisors. "That's still an incredibly strong rating. The drop in federal jobs (really started under DOGE last year) leaks into commercial real estate where vacancies are elevated and declines in property taxes via valuations. But also on tax revenue on both income taxes as well as sales taxes in the city." 

With no further cuts in the federal government workforce expected, Mousseau added, "We are not worried about the city's finances per se."

Rising costs and flat revenue projections led the city council in late June to approve a budget that drew about $150 million from its reserves and $300 million in one-time funds to address a budget hole. 

Click here to read the full article on the Bond Buyer website. 

John R. Mousseau, CFA
Chief Investment Officer
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