Municipal bonds traded with a lighter tone Thursday afternoon as the week’s largest deals priced earlier in the week and bonds in the secondary market started to look expensive after a week of higher prices.

“The market feels slow,” a trader in Maryland said. “There’s low supply, a diminutive syndicate calendar, the metaphorical floor the Fed put down after pulling out on tapering. I don’t see how the rally can slow.”

Still, after a week of a slow grind lower in yields, bond prices look expensive. “It’s getting hard to sell low yields and we are starting to run into huge premiums on the big coupons,” this trader said. “Credit spreads are tight and hot double-A-rated names are getting priced on the scale or through it.”

On Wednesday, yields on the triple-A Municipal Market Data scale ended as much as three basis points lower. The 10-year and 30-year yields fell two basis points each to 2.54% and 4.11%, respectively. The two-year was steady at 0.36% for the fourth session.

Yields on the Municipal Market Advisors scale ended as much as two basis points lower. The 10-year and 30-year yields slid one basis point each to 2.69% and 4.24%, respectively. The two-year was steady at 0.54% for the fifth consecutive trading session.

Treasuries continued to drift higher Thursday afternoon. The benchmark 10-year yield rose five basis points to 2.67% and the 30-year yield rose four basis points to 3.69%. The two-year was steady at 0.35%.

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