Municipal bonds took a breather last week, underperforming Treasuries for only the second week thus far in 2012. Municipal bond prices posted modest declines while Treasury prices rebounded on the week. On a year-to-date basis, however, high-quality municipal bonds have outperformed Treasuries by a notable margin, according to Barclays Index data. We do not think last week’s pause in the municipal bond market marks a turning point …

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Municipal Breather