A fading Treasury rally wasn’t enough to dampen the firmer tone for municipal bonds Thursday afternoon as muni prices extended gains into another session, building off the stronger tone after Wednesday’s Fed announcement.

Throughout the trading session, traders said munis continued to climb higher. “Munis are in good shape,” an Ohio trader said, adding the market feels about five basis points stronger. “Coming in this morning we needed to play a little catch-up from the late afternoon bid that Treasuries caught yesterday and we’ve been able to hold firm at those levels even with Treasuries giving back a few basis points today.”

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