The U.S. municipal bond market is experiencing a significant sell-off, driven by persistently rising Treasury yields and a surge in U.S. state and local government bond issuance. According to Bloomberg data, as of 3:00 PM ET on Thursday, the yield on the benchmark 30-year municipal bond rose 14 basis points to 4.89%, reaching its highest level since February 2011 and marking its largest single-day increase since April 2025. The yield on the benchmark 10-year municipal bond also rose by as much as 15 basis points to 3.69%, also a new high since April 2025. This sharp decline in municipal bonds is primarily influenced by the dramatic volatility in the U.S. Treasury market, where the 10-year Treasury yield briefly climbed 12 basis points to approximately 4.96% on Thursday, its highest since October 2023. JPMorgan Chase data indicates that investors withdrew approximately $460 million from municipal bond funds on Wednesday, the largest single-day net outflow since April 2025.