WASHINGTON, March 6 The U.S. municipal bond
market shrank for three straight quarters last year to reach
$3.671 trillion in the fourth quarter, the smallest amount of
outstanding debt in five years, Federal Reserve data released on
That compares to $3.686 trillion in the third quarter of
The largest holders of municipal bonds, individual
investors, continued to flee the market, as well. The household
sector shed $147 billion bonds in the fourth quarter, after
dropping $83.1 billion the quarter before.
Meanwhile, mutual funds also pulled out. They dropped $39.3
billion bonds in the fourth quarter, while closed-end funds shed
$100 million and exchange-traded funds $300 million.