Municipal Bonds Fall on Growing Supply, Geopolitical Angst (1)

Municipal bonds dropped the most in months as supply starts to pick up and geopolitical concerns hammer the US Treasury market.

Top-rated state and local government debt yields rose as much as seven basis points on Tuesday as of 4 p.m. in New York, marking the biggest such move for 10- and 30-year bonds since July, according to data compiled by Bloomberg.

“This is a typical January test when the calendar starts to ramp up,” Kimberly Olsan, senior portfolio manager at Newsquare Capital, said in an interview.

The muni market’s so-called “January effect” is ...