The Bond Buyer’s weekly yield indexes declined during the seven-day period ending Thursday as tax-exempts continued to rally to historical lows.

“It was sort of a repeat of last week, except with more force behind the rally,” said Michael Pietronico, chief executive officer at Miller Tabak Asset Management.

“From the perspective of the market, the Federal Reserve re-energized the bulls with the statement Tuesday,” he said. “It’s going to be difficult to see yields go back up in any meaningful way, unless the data turns upward real soon. Right now, the market is just riding this wave.”

The Federal Open Market Committee downgraded its outlook for economic growth Tuesday, saying the recovery was likely to be “more modest” than previously anticipated.

When considering just how low yield levels could go, Pietronico noted that after the 10-year reached another record low Thursday — at 2.43% — “the natural answer is 0%.”

“One can’t get away from comparisons in the press to Japan,” he said. “Well, the 10-year JGB is 0.98%, so if you use that as a guidepost, we have a fairly long way to still go.”

The Bond Buyer 20-bond index of 20-year general obligation bond yields declined 10 basis points this week to 4.06%. That is the lowest level the index has reached since Oct. 8, 2009, when it was also 4.06%.

The 11-bond index of higher-grade 20-year GO yields dropped nine basis points this week to 3.80%, its lowest level since Oct. 8, 2009, when it was also 3.80%.

The revenue bond index, which measures 30-year revenue bond yields, declined five basis points this week to 4.74% to reach its lowest level since Oct. 8, 2009, when it was 4.69%.

The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, dropped nine basis points this week to 0.46%, which is its lowest level since March 31, when it was 0.43%.

The yield on the 10-year Treasury note declined 16 basis points this week to 2.75%. This is the lowest level since April 2, 2009, when the yield was also 2.75%.

The yield on the 30-year Treasury bond fell 11 basis points this week to 3.95%, which is its lowest level since July 22, when it was also 3.95%.

The weekly average yield to maturity on The Bond Buyer’s 40-bond municipal bond index, which is based on 40 long-term municipal bond prices finished at 5.04%, down four basis points from last week’s 5.08%.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.