Municipal bond yields continued their steady decline since February 2011. Yields dropped from 4.78% to 4.32% for 30-year municipal bonds and from 3.05% to 2.59% for 10-year municipal bonds. Yields on Treasuries also fell in May, declining from 4.41% to 4.26% for 30-year bonds and from 3.33% to 3.14% for 10-year notes. Importantly, spreads between municipals and Treasuries narrowed.
Source: Bloomberg (www.bloomberg.com)