The tax-exempt market opened on a quiet note again Wednesday as traders said there wasn't enough trading to push the market in either direction.

While several new deals hit the primary market Tuesday and more were expected Wednesday, traders said the market felt relatively quiet compared to last week.

Illinois postponed its $500 million general obligation bond deal until further notice. The bonds are rated A2 by Moody's and A-minus by Standard & Poor's.

"It's quiet across the yield spectrum," a Chicago trader said. "There is nothing to show direction. FOMC day is usually quiet in the morning." The Federal Open Market Committee is expected to release a statement of monetary policy later Wednesday afternoon.

In the primary market, Goldman, Sachs & Co. is expected to price for retail $335 million of Bay Area Water Supply And Conservation Agency revenue bonds for the Capital Cost Recovery Prepayment Program, rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.

Raymond James is expected to price $150 million of Maine Health and Educational Facilities Authority Eastern Maine Medical Center bonds, rated Baa1 by Moody's and BBB by Standard & Poor's.

In the competitive market, North Carolina is expected to auction $325.6 million of general obligation bonds.

Reads on the municipal bond market showed softening for the second session this week.

The Municipal Market Data scale ended lower for the fourth consecutive session. The 10-year yield rose one basis point to 1.80% while the 30-year yield increased two basis points to 2.84%. The two-year finished steady at 0.34%.

The Municipal Market Advisors 5% coupon triple-A benchmark scale also showed weakening. The 10-year yield and the 30-year yield rose one basis point each to 1.82% and 2.92%, respectively. The two-year held steady at 0.35%.

Treasuries were softer Wednesday morning despite a poor employment report. The benchmark 10-year yield rose two basis points to 2.02% while the 30-year yield increased three basis points to 3.20%. The two-year was steady at 0.29%.

In economic news, real gross domestic product unexpectedly fell 0.1% in the fourth quarter of 2012, falling short of economists' predictions of a 1.2% increase. The drop also came after a 3.1% jump in growth for the third quarter 2012.

"This report says more about the difficulty of measuring the overall activity in a $15 trillion economy than it says about the economy itself," wrote economists at RDQ Economics. "Ostensibly, real economic activity contracted slightly in the fourth quarter on a very sharp slowing in inventory investment and a massive drop in defense spending. Private sector spending was fairly robust with real PCE up 2.2%, residential investment jumping 15.3%, and business equipment spending up 12.4%. We expect strength in business investment and housing to carry growth in 2013."

They added that, "If anything, we would say the core of the report was a little stronger than we were expecting and we are not concerned that the economy is slipping back into recession. Inflation was generally contained in the quarter with the GDP price index rising only 1.7% over the last year and PCE prices up only 1.5% on the same basis."

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