Municipals were unchanged to slightly weaker Wednesday morning as traders awaited the outcome of the two-day meeting of the Federal Open Market Committee.
"We're sitting tight and waiting for the Fed, that's what's happening," said a New York trader. "This could be significant and change the market."
Municipal bond yields were unchanged from 2015 to 2020, while the 2021 to 2044 maturities were unchanged to as much as two basis points lower early Wednesday, according to Municipal Market Data.
The 30-year triple-A general obligation bond in 2044 yielded 2.96% at the close of trading on Tuesday, according to MMD.
"There are not a lot of significant trades people are focused on the Fed today," said a second New York trader, pointing to anticipation of the Fed's policy statement on ending quantitative easing.
"I really don't see any calendar. I think the Street is heavier than they were in terms of positions, and there's a lot of money on the sidelines."
He said a rise in interest rates could be just what the market needs to make it attractive and get some of that money invested.
In the primary market, the order period for the $339.8 million Jackson City, Mo., special obligation refunding was in full swing and getting lots of attention from cash-flush institutional investors, according to an underwriter at senior book-runner Oppenheimer & Co. on Wednesday morning.
The bonds, which were originally sold for the Harry S. Truman Sports Complex project, are structured to mature serially from 2015 to 2031.
The Treasury market was also light on supply as yields rose on Wednesday morning awaiting news from the Fed, with the 10-year note yielding 2.305% and the 30-year bond at 3.084%.
The second New York trader said he observed Treasuries off "a quarter and a half of a point" in early trading depending on maturity.
