Munis Rise as Bonds Rally on Job Data Cementing Rate-Cut Bets

Municipal bonds rallied after weaker-than-expected job growth raised expectations that the Federal Reserve will start lowering interest rates this month to support the economy.

Yields on top-rated state and local government debt fell alongside those on Treasuries. Rates on 10-year benchmark tax-exempt bonds dropped 8 basis points to 3.05%, the lowest since April, according to data compiled by Bloomberg, with a greater move seen in other longer-dated securities.