The municipal market started slowly out of the gates Thursday morning.

Traders reported modest activity in taxable paper in the secondary. Activity in tax-exempts has been sparse.

There has been little follow-though in the market from the Federal Open Market Committee meeting announcement Wednesday afternoon, a trader in New York said.

"We've seen some activity on the taxable side," the trader said. "There's no read yet on yields. We need a move, and we're just not getting one yet."

The FOMC meeting yielded little change in policy. The Fed said it would continue to purchase $85 billion a month and peg the target range for the federal funds rate between zero and 0.25% as long as the unemployment rate remains above 6.5% and inflation is projected to be no more than 2.5%.

Two deals of note are expected to reach the market Thursday. Citi is expected to price $180 million of revenue and refunding bonds for the Raleigh, N.C., Combined Enterprise System. Citi is scheduled to price $100 million of revenue bonds for the New Jersey Turnpike Authority.

An early read from the Municipal Market Data triple-A GO scale showed tax-exempt yields up to two basis points lower beyond 15 years.

The 10-year yield on Wednesday fell three basis points to 1.66% and the 30-year yield dropped five basis points to 2.79%. The two-year finished steady at 0.29% for the 19th session.

Yields on the Municipal Market Advisors 5% scale ended Wednesday as much as four basis points lower. The 10-year declined two basis points to 1.73% and the 30-year yield fell three basis points to 2.95%. The two-year was flat at 0.32% for the 19th session.

Treasury yields started Thursday slightly higher beyond the front end of the curve. The benchmark 10-year yield inched up one basis point to 1.64%; the 30-year yield ticked up one basis point to 2.84%. The two-year yield held at 0.21%.

In economic news, the Labor Department reported Thursday that the drop in initial claims for U.S. state unemployment benefits far exceeded expectations for the week of April 27. The number declined by 18,000 to 324,000, its lowest level in more than five years.

Economists expected a claims level of 345,000, representing an increase 6,000 from the number previously reported for the week of April 20. The 339,000 figure for last week was later revised up to 342,000.

Also, the Commerce Department reported Thursday that the U.S. international trade deficit decreased 11% in March to $38.8 billion from the revised $43.6 billion deficit in February.

The department originally reported the February trade balance as a $43 billion deficit.

The March deficit arrived below the median $42.2 billion figure Thomson Reuters economists estimated. It stemmed from total exports of $184.3 billion and imports of $223.1 billion.

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