As the municipal market heads into the fourth quarter, it stands almost midway between its high and low yields for the year. Odds are that it will to do pretty well between now and year's end.

The Bond Buyer Index rose last week to 6.33%, which is 46 basis points below its March 19 high of 6.79% and 44 basis points above its July 30 low of 5.89%. At this level, it's as good a time as any to assess the outlook for the quarter ahead and try to figure out where interest rates are headed between now and New Year's Day. In this effort, the case for lower rates seems more convincing.

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