With steadily rising prices and strong demand from investors, the municipal bond market has much to be thankful for this month. Just over the horizon, however, a heap of trouble lies ahead.

Bond prices have climbed for three weeks even in the face of heavy volume, and investors have stepped up to buy bonds at yield perhaps 35 basis points lower than they were late in October. It's hard to know why exactly the fixed-income market ended a two-month slide and became more optimistic, but it did.

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