NEW YORK (Reuters) – The size of the U.S. municipal bond market inched up to $3.853 trillion in the second quarter, from $3.851 trillion the quarter before, the Federal Reserve said in a report released on Thursday.
Households, or retail investors, held $1.625 trillion of debt sold by states, cities, schools and other muni issuers in the latest quarter, down from $1.631 trillion in the first quarter, the Fed report said.
Property and casualty insurance companies took on $16.7 billion of munis in the second quarter, a rise from $14.1 billion in the previous quarter. Life insurance companies bought $4.6 billion, compared with $7.7 billion the prior quarter.
Exchange-traded funds bought $7.9 billion of muni funds compared with $2.8 billion in the first quarter.
Meanwhile, U.S. mutual funds’ buying of municipal bonds dropped to $20.5 billion in the second quarter from $64.9 billion the first quarter.
U.S. banks continued to offload muni bonds in the second quarter. The financial institutions shed $40.3 billion, after selling $55.7 billion the previous quarter.
by Laila Kearney
SEPTEMBER 20, 2018
Reporting by Laila Kearney; Editing by Steve Orlofsky