The sell-off in municipal bonds finally appeared to sap some retail demand for state and local government debt last week as muni mutual funds reported taking in the paltriest amount of new money in six weeks.Municipal bond mutual funds that report their figures weekly posted a net inflow of $638.2 million during the week ended Sept. 15, according to Lipper FMI, the lightest inflow since early August.

All muni mutual funds, including those that report their figures monthly, have been posting an average of $1.02 billion in new money from investors a week the past four weeks, still a very robust pace by historical standards.

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