Delayed Reaction to Fed Brings Munis Higher; Treasuries Continue Uptick

Curran, Bill; Johnson, Anastasija
December 2004
Bond Buyer;12/16/2004, Vol. 350 Issue 32031, p2
Trade Publication
The article provides information about the municipal market's climbing higher and absorbing new issues as a reaction to the U.S. Federal Reserve Board's statement. Traders said yields on longer-dated tax exempt securities fell three to five basis points as the Treasury market broke through its recent trading range. Treasuries continued an uptick that began Tuesday when the Board raised the fed funds rate 25 basis points and indicated that rate hikes would proceed at a "measured" pace. The market's tone was robust as traders were able to find buyers for some bonds that has been gathering dust in their inventories. But with yields continuing their slide as prices rise, other participants said activity was dominated by speculators while longer term investors were reluctant to buy, creating a bifurcated market.


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