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Muni Yields Spike as Government Bond Selloff and Heavy Supply Weigh on Prices

Published Sep 11, 2026
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Summary:
  • Municipal yields rose up to 15 basis points, and the longest maturities hit their highest levels since 2011.
  • The 30-year benchmark muni closed at 4.89% at 4 p.m. in New York, up 14 basis points, the most since April 2025 and the highest since February 2011.
  • New deals hit hard: about $3.8 billion for an Alabama bridge, roughly $778 million for New York's transit network, and around $1.6 billion of New York City GOs.

What moved yields

Municipal bonds sank alongside a selloff in US government securities and a burst of new muni issuance. The 10-year benchmark yield moved up by 15 basis points, reaching 3.69% - its highest level since April 2025, a period when swings tied to President Donald Trump's tariff policies rattled the market. The selloff was most acute in the long end: by 4 p.m.

New York time, the 30-year yield had risen 14 basis points to 4.89%. That is the sharpest daily rise since April 2025 and the loftiest level since February 2011.

Supply and withdrawals

Borrowers flooded the market and amplified the weakness. On Thursday, the Alabama Toll Road, Bridge and Tunnel Authority completed about $3.8 billion of bonds to help finance construction of a new crossing of the Mobile River. New York City's transit network brought roughly $778 million of bonds to market that are secured by a levy on luxury real-estate transactions, and on Wednesday the city sold about $1.6 billion of general obligation bonds. Investors also pulled cash: about $460 million exited muni funds on Wednesday, the largest outflow since April 2025, according to JPMorgan.

Why investors are nervous

Two broad forces framed the session: investors were let down by the Treasury Department's planned bond repurchases, while rising oil revived worries about inflation. JPMorgan analysts led by Peter DeGroot wrote that "the confluence of rising UST rates, heavy municipal supply, low reinvestment, and tax-related trading has exerted significant pressure on the municipal market."

Steady investing habits help you protect savings and grow wealth over time. Join Briefs Finance CEO Jaspreet Singh on September 29th for a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, where he shows how we're spotting investment opportunities as the dollar falls. Save your spot.

What this means for your portfolio

Bigger yields and a pile of new deals mean higher income potential but softer prices right now. The latest levels on 10s and 30s, plus the week's outsized issuance and fund outflows, are the key context points as you look at your muni mix.

A calm plan keeps your money working through uncertainty and new opportunities. Our CEO Jaspreet Singh is hosting a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, on September 29th. Sign up free to join him live.

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