Municipal bond yields surpass 5% amid fixed-income selloff

municipal bonds: Municipal bonds are debt securities issued by state and local governments or related public authorities to finance public infrastructure and services. They are relevant here because a broad fixed-income selloff has pushed benchmark long-term municipal yields above 5%, marking a sharp deterioration in market returns. Market trend: Municipal-bond yields have risen alongside Treasury rates and heavy new issuance, with the longest maturities reaching their highest levels in many years. Investor flows: Recent volatility has prompted withdrawals from municipal-bond funds after an extended period of inflows. Relative value: Municipal bonds have moved near their cheapest relative levels to Treasuries in about a year, potentially increasing their appeal to some tax-sensitive investors.