The 30-year yield on U.S. municipal bonds exceeded 5% for the first time since at least 2011.

A painful fixed-income market selloff is eroding returns on U.S. state and local government debt, pushing the benchmark 30-year municipal bond yield above the 5% mark. According to data compiled by Bloomberg, the yield rose by as much as 8 basis points to 5.03%, the first time since at least January 2011. As of 1 p.m. New York time on Thursday, the 10-year municipal bond yield rose 8 basis points to 3.95%. Inflation concerns and expectations of further Federal Reserve rate hikes have disrupted the municipal bond market. As of Wednesday, municipal bonds had fallen 2.8% in September, putting the asset class on track for its worst monthly performance since 2023.