Municipal bond yields tumbled to a record low Friday as constrained supply coupled with the prospect of a protracted period of low interest rates to prod more investors into state and local government debt.

The yield on the benchmark 10-year triple-A municipal bond closed Friday at a record 2.54%, based on the Municipal Market Data scale. The previous mark of 2.56% was established Thursday.

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.