Municipal bond prices ended unchanged to a quarter-point higher yesterday, as euphoria in the government market over the Federal Reserve's 75 basis-point increase in short-term interest rates proved fleeting.

"I think you had a little psychological bounce because they raised [shortterm rates] more than people expected, but I think overall people are still looking for higher rates," one trader said. Traders earlier said the market had been expecting at least a half-point increase. Another municipal trader said the puzzling thing about yesterday's action by the central bank was the length of time it took before the Fed announced the move.

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