Following yesterday's increase in short-term interest rates, some analysts are predicting that the taxable and tax-exempt yield curves will continue moving in different directions as they have for most of this year. If that happens, the tax-exempt bond market will probably move in one direction while the tax-exempt swap market moves in another.

And that means municipalities looking for swaps may find better rates if they opt for transactions based on taxable indexes, instead of the more conventional Public Securities Association or J.J. Kenny indexes.

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