Takeaways by Bloomberg AI
- 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, with rates on 10-year benchmark tax-exempt bonds dropping to 3.05%, the lowest since April.
- Investors now see a quarter-point rate cut at the Fed’s Sept. 16-17 policy gathering as a sure thing and anticipate a total of three such cuts this year, according to futures contracts.
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.
Bloomberg Business
By Danielle Moran and Aashna Shah
September 5, 2025