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March 30, 2015
NEW YORK — Conditions were nearly perfect for municipal bonds last year, leading to sizeable returns. Perfection never lasts, though, and managers of municipal-bond funds are forecasting more modest returns in upcoming years.
The backdrop for municipal bonds last year was as pleasant as the first warm, spring breeze: Interest rates were falling, the economy was strengthening, demand was high for bonds that pay tax-free income and supply was relatively low. Add it up, and the Barclays Municipal Bond index returned 9.1 percent in 2014. Just don't expect a repeat.
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