---
title: "Tax-exempt yields reversed a September selloff, and the median intermediate municipal bond fund is up 1% over the year"
url: "https://etf.net/news/municipal-bond-yields-reverse-selloff-2026-11-13"
published_at: "2026-11-13T16:05:24.914Z"
updated_at: "2026-11-13T16:05:24.914Z"
byline: "ETF.net Research"
---

# Tax-exempt yields reversed a September selloff, and the median intermediate municipal bond fund is up 1% over the year

The 10-year yield on top-rated municipal bonds was a basis point from its Aug. 14 level by Nov. 6, while the 10-year Treasury was still higher than on Aug. 14.

By ETF.net Research. Published Nov 13, 2026.

The 10-year AAA municipal yield, a benchmark for the highest-rated tax-exempt bonds, was 3.23% on Aug. 14, 4.23% on Sept. 29 and 3.24% on Nov. 6, AllianceBernstein reported in its [Nov. 9 market note](https://www.alliancebernstein.com/content/dam/global/insights/insights-external-pdf/2026/muniland/11-09-26-the-week-in-muniland.pdf). AllianceBernstein called that a round trip.

The median intermediate municipal bond fund is up **1.0%** over the past year through Nov. 12, income included, after losing **4.8%** in the third quarter.

These funds hold bonds of U.S. states and cities and seek income exempt from U.S. federal income tax. The largest, PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund MUNI, seeks that income while preserving capital.

## Tax-exempt yields rose more than Treasuries

The 10-year U.S. Treasury yield was 4.68% on Aug. 14, 5.26% on Sept. 29 and 4.86% on Nov. 6. It rose less than that municipal yield into late September, then fell, and it was still above its Aug. 14 level.

The municipal yield is tax-exempt. The Treasury yield is not.

The U.S. Municipal Securities Rulemaking Board (MSRB) said in its [third-quarter summary](https://www.msrb.org/sites/default/files/2026-10/Third-Quarter-2026-Municipal-Securities-Market-Summary.pdf) that the volume of selling by investors was likely a major reason tax-exempt bonds fell further than Treasuries in September.

Goldman Sachs Asset Management said in its [Oct. 12 review](https://am.gs.com/en-us/advisors/insights/article/municipal-quarterly-review-and-outlook) that, beyond the rise in Treasury yields, heavy tax-loss selling, slower reinvestment of cash from bonds and a large supply of bonds pushed municipal yields higher.

The MSRB wrote in its [October recap](https://www.msrb.org/sites/default/files/2026-11/October-2026-Market-Recap_0.pdf):

“The rise in benchmark yields in September was the largest monthly increase in years. However, the rally in October erased most of that increase.”

## Where intermediate municipal funds stand

For 2026 through Nov. 12, the median fund is up 0.6%. MUNI lost 4.8% in the quarter, the same as the median, and returned 0.8% over the past year, close to the category's 1.0%.

The iShares Core U.S. Aggregate Bond ETF AGG lost 3.5% in the third quarter and 1.3% over the past year.

Chart: Munis lost more than AGG in the quarter, then finished the year **ahead**

The median municipal fund lost more than AGG in the quarter. Over the year, it finished ahead of AGG.

Source: etf.net, https://etf.net/news/municipal-bond-yields-reverse-selloff-2026-11-13. Please cite the page URL.