Weak money supply data increased hopes for yet another ease in monetary policy Friday, and yields continued to drop, despite heavy issuance that totaled $4.2 billion last week and is expected to top $3.4 billion this week.

Treasury prices moved higher, with municipals lagging, on Friday after speculation that the Federal Reserve would have to ease monetary policy on recent weak money supply figures. The Bond Buyer's 40-bond index dipped to 6.92% last week, the lowest level since it was created in 1985.

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