Cautious optimism that the Federal Reserve Board won't tighten its monetary policy this month helped push yields on The Bond Buyer's indexes modestly lower.

The 20-bond and 11-bond indexes of general obligation yields each declined six basis points, to 6.16% and 6.08%, respectively, from 6.22% and 6.14% a week. ago.

The revenue bond index was off 10 basis points, to 6.37% from 6.47% a week earlier.

The weekly indexes have not descended to such low levels since June 16, when the 20-bond was 6.04%, the 11-bond was 5.95%, and the revenue bond was 6.34%.

The average yield to maturity of the 40 bonds used in the daily Municipal Bond Index, most of which are revenue bonds, declined nine basis points, to 6.31% yesterday from 6.40% the previous Thursday.

Treasury prices responded better to the delay on Fed tightening, as the Treasury's bellwether 30-year bond fell 14 basis points on the week, to 7.40% yesterday from 7.54% a week earlier.

"The main emphasis for the [municipal] market holding steady this week has been expectations that the Federal Reserve Board will postpone tightening another month," a bond market analyst said. "The economic picture has been mixed with home and auto sales showing surprising weakness. Also, the dollar, which started out weak, has stabilized over the remainder of the week.

"The market's on hold right now until the July jobs report," the analyst continued. "But the consensus is that nonfarm payrolls will be harmless -- 200,000 or less."

In the short-term sector, The Bond Buyer's one-year note index dropped 18 basis points Wednesday, to 3.94% from 4.12% a week ago. That is the one-year note's lowest level since July 6, when it was 3.80%.

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