Municipal bond yields are likely to stabilize after surging the past few weeks, as new supply may decline in the second half of the year and individual investors may start to put their accumulated cash to work, according to strategists at Citi.

Since the end of April, yields on the Municipal Market Data's triple-A curve are up about 50 to 65 basis points from 10-year maturities out to 30-year maturities. On June 12, the 30-year triple-A yield was at 3.52%, up from 2.84% at the end of April.

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