The policy-sensitive 2-year Treasury yield jumped back above 4% after the Wall Street Journal reported that JPMorgan Chase & Co., Morgan Stanley and other big banks are discussing a deal to shore up First Republic Bank. Rates on 6-month and 1-year T-bills spiked by 15 and 18 basis points, respectively, to 4.795% and 4.389%. Traders have been highly focused on First Republic for insight on the extent of further risks in the banking sector. Investors’ views on the health of the financial sector have overtaken incoming data as the main driver of market moves, according to BMO Capital Markets.
…
