As the yield rises, municipal bonds are considered attractive.

Jamie Iselin of Loomis Sayles told The Wall Street Journal that rising yields mean municipal bonds are becoming cheaper, creating a window to buy bonds and profit when the situation reverses. "We've decided to adjust the duration to be shorter than their respective benchmarks, back to neutral," he said. He noted that new bonds constantly entering the market are creating more choices for investors. Iselin expects the Federal Reserve to remain on hold for a period of time, keeping buying opportunities open. "I think this will be a fairly good environment for municipal bonds."