Municipal bonds are currently undergoing a significant selloff, pushing benchmark yields to their highest levels since at least 2011. This downturn is attributed to renewed inflation concerns, anticipation of further interest rate hikes, and an increase in oil prices, all of which are putting pressure on financial markets.
As of September 23, 2026, 10-year state and local debt yields rose nine basis points to 3.87% by 4 p.m. New York time, marking the highest point since January 2011. Similarly, 30-year benchmark yields jumped eight basis points to 4.96%, reaching their highest level since February 2011.
This movement in the municipal bond market follows a broader selloff in US Treasuries, which has already pushed benchmark Treasury yields to their own highest points. The current market conditions reflect a challenging environment for fixed-income investments, as investors react to macroeconomic pressures.
