It’s most likely your email account has been spoofed & your account has not been compromised. However is the sent email in your sent items folder? If so then your account has been hacked so you should change your password immediately.
Then the account has been spoofed, it’s good that the sent emails aren’t under the sent items folder as it means the account hasn’t been hacked. Yes the failed delivery will end up being sent to you. The original email may be within the Message Source information.