Muni Market Rout Deepens as Iran War Stokes Inflation Concerns

Pressure is building in the US municipal bond market.

State and local debt sold off again on Friday, with benchmark yields climbing as much as seven basis points. The asset class is now poised for its worst month of performance in a year as the war with Iran shows no signs of easing, driving concerns about inflation in economies around the world.

Munis, which tend to be more stable than other areas of the bond market, are taking note of the conflict, according to John Mousseau, chief investment officer of Cumberland Advisors.

“I don’t think the muni market is ...