After remaining relatively flat for the first six weeks of the year, Muni yields took a sharp turn higher in mid-February, finally beginning to catch up to the rise in U.S. Treasury yields. Improving economic growth numbers combined with the proposed $1.9 trillion Federal Stimulus Bill have resulted in continued expectations of increasing inflation leading to higher yields. Inflows into Muni Mutual Funds continued for the month but at a much slower pace and we expect lower inflows or even an outflow cycle over the coming weeks, resulting in reduced demand. Our defensive approach has held up through this selloff and we are now looking for opportunities at these higher yield levels.