"Compared to taxable yields, 6 percent is attractive," one note trader said.

For an investor in the 36 percent tax bracket, that would be equivalent to a taxable yield of 10.08 percent.

For an investor in the 31 percent tax bracket, the equivalent taxable yield without including local taxes is 7.30 percent.

But they say that a one-half point difference in taxable yield may not justify the added risk of a long-term bond fund.

The seven-day taxable compounded average yield for a money market mutual fund stood at 6.13 percent, a drop of 6 basis points from last week.

When the state tax is added to the Federal tax, taxable equivalent yields become even larger.

This compared with taxable yields of 5.14 percent.

That is equivalent to a taxable yield of 4.85 percent for investors who pay tax at a marginal rate of 35 percent.

For investors in a 28 percent tax bracket, an equivalent taxable yield would be 7.97 percent.

The rise in interest rates generally has pushed the seven-day taxable yield to a 17-month high.