Municipal prices climbed along the curve, with 10-year munis logging their strongest rally since last April as Treasuries advanced. At 12 p.m. in New York, the 10-year muni yield dropped 13 basis points to 3.77%, putting it on track for the biggest one-day decline in the last 18 months, per Bloomberg data. The 30-year benchmark decreased 13 basis points to 4.99%, putting it on course for its sharpest single-day decline since April 2025.
CIBC Private Wealth Management's Chris Lanouette, a managing director, said, "Weakness in equities resulted in a flight-to-quality move, providing support for the long end of the yield curve." He added, "That demand spilled over into the municipal market, pulling yields lower."
After a bruising September that was the worst in almost 20 years, munis have rebounded, up nearly 1% month to date as of Wednesday. The earlier selloff was driven by inflation worries tied to the Iran war and the prospect of more rate hikes. DWS Group's Chad Farrington, who serves as co-head of municipal-bond investment strategy, said, "The risk-off sentiment that appears to be driving the rally in US Treasuries is spilling into the municipal market and further aided by continual positive flows into ETFs."
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