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Municipal yields drifted higher in August after falling in July, with the curve steepening in concert with U.S. Treasuries. Muni Mutual Fund inflows have continued for 15 consecutive weeks, taking in another $11 billion in August. The curve remains steep, especially in the six- to 10-year area, where we’re finding opportunities to pick up additional yield while not adding significant additional duration risk. Credit spreads remain elevated but have narrowed from their peak, signifying a “reach” for yield.