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The economy is slowing down, and recession is possible. Municipal bonds offer tax-free yields up to 12.4% for federal income and 17% for California residents. Closed-end funds like Nuveen AMT-Free Quality Municipal Income Fund (NEA) provide higher yields and trade at discounts to their net asset value. Muni bonds are safe with default rates around 0.1% and are secured by state "rainy day funds."
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