Muni Yields Creep Higher on Fed's Inflation Concerns, Higher CPI

Johnson, Anastasija; Curran, Bill
March 2005
Bond Buyer;3/24/2005, Vol. 351 Issue 32097, p2
Trade Publication
The article reports that the municipal bond market finished in negative territory in March 2005 even though Treasuries rebounded in the afternoon, as yields continued to creep higher to reflect concerns about inflation expressed by the Federal Reserve and confirmed by a higher-than-expected consumer price index. When the market goes through sharp moves, the bid side turns shallow and weak, leading to wide bid-ask spreads and sluggish activity. Traders said the municipal bond market underperformed Treasuries because it also had to distribute a few sizeable new issues before an abbreviated session and a full market close.


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