December 8, 2016 / 5:05 PM / 7 months ago

U.S. muni bond market shrinks to $3.831 trln in Q3-Federal Reserve

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NEW YORK, Dec 8 (Reuters) - The U.S. municipal bond market shrank slightly to $3.831 trillion in the third quarter from a revised $3.838 trillion in the second quarter, according to a quarterly report from the Federal Reserve released on Thursday.

Households, or retail investors, held $1.591 trillion of muni bonds compared with $1.598 trillion the previous quarter.

Property and casualty insurance companies bought $19 billion of munis in the third quarter after a revised $1.9 billion of acquisitions in the second quarter. Life insurance companies added $7.6 billion to their muni holdings, while U.S. banks picked up $40 billion.

U.S mutual funds bought $75.9 billion of munis in the third quarter, and exchange-traded funds added $6.2 billion.

Foreign owners bought $14 billion of muni bonds. Their third quarter holdings were $93.3 billion, the highest level on record. (Reporting by Hilary Russ)

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