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(Bloomberg) -- State and local debt prices rallied across the curve with ten-year municipal bonds posting their biggest gain in more than a year after a nearly two-week selloff. Benchmark 10-year muni yields fell 11 basis points to 4.11% at 4 p.m. in New York, marking the biggest jump since April 2025 and first gain since Sept. 17, according to data compiled by Bloomberg. Thirty-year benchmark yields dropped 6 basis points to 5.19%. “The rally today — it seems to be that the market was oversold, and this is just a correction,” said Dora Lee, director of research at Belle Haven Investments. “However, the big question is: how much of a correction is this, or is this kind of a dead cat bounce situation?”“Given this momentary breather from this selloff, on the primary side, a lot of issuers are trying to come into the market where they can,” she said, adding that there’s the outlook for Federal Reserve hikes later on.The Convention Center Authority of the Metropolitan Government of Nashville and Davidson County is offering about $790 million of muni bonds, according to preliminary pricing wires seen by Bloomberg. The deal was supposed to price last week, and is now slightly larger than planned, according to bond documents and the preliminary wires. Goldman Sachs Group Inc., the senior manager for the deal, declined to comment. A representative for the authority didn’t immediately respond to a request for comment.As of Tuesday, muni returns are down about 5% this month, headed for their worst monthly performance since 1987, according to data compiled by Bloomberg. That coincides with losses across fixed income in September.“Munis may be a bit more stable today than the past few days because absolute yields have reached levels to bring some buyers off the sidelines,” said Leslie Martin, a portfolio manager at Cavanal Hill Investment Management.--With assistance from Amanda Albright.(Updates prices in second paragraph and adds Nashville deal in fifth paragraph.)More stories like this are available on bloomberg.com©2026 Bloomberg L.P.
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