Inflows returned as Lipper reported $775.006 million was added to municipal bond mutual funds in the week ended Wednesday after $361.649 million of outflows the week prior.
Although there is some volatility in the municipal market, the landscape is in good shape, according to Cooper Howard, fixed income strategist at Charles Schwab.
"We did see some bump in the curve as a result of the FOMC hiking rates by 25 basis points on Wednesday," said Jason Wong, vice president of municipals at AmeriVet Securities. "However, with an unexpected high employment number, fixed-income yields rose."
"The market started the year with a reduction of the oppressive pressure caused by last year's heavy net outflows from mutual funds," said CreditSights strategists Pat Luby and Sam Berzok.
Friday's payrolls "surprised to the upside, with nonfarm payrolls increasing 517,000 last month after an upwardly revised 260,000 gain in December," Barclays strategists said.