“The failure of Silicon Valley Bank along with Silvergate Bank and the Signature Bank of New York has created what is possibly an inflection point in the bond markets,” John Mousseau, president and director of fixed income at Cumberland Advisors, wrote in a commentary Wednesday noting the flight to quality. “The effect on the fixed-income markets has been nothing short of astonishing.” The crisis cut a wide swath across the market with … daily shifts in tax-exempt movement sometimes aligned with Treasury fluctuations and sometimes against. Some believe regional banks could face intensified scrutiny that stands to impact their role in the municipal market, but that remains to be seen. … While federal intervention has managed to tamp down worries and the crisis doesn’t bear striking resemblances to the 2008 financial crisis — that took down Wall Street investment banking behemoths Lehman Brothers and Bear Stearns — it has stirred up painful memories.
Source: The Bond Buyer
