Hurricane Ian Notice

Due to the impending Hurricane Ian and its impact on the Sarasota area; Cumberland Advisors has mobilized and relocated our disaster recovery team to our Vineland, NJ office. If the storm does affect the Sarasota area, Cumberland Advisors’ staff members are on standby, and ready to provide you with any assistance you may need.  Our phone lines and emails will be monitored, and we will respond to matters on a priority basis.
 
For any urgent concerns you may also contact the following individuals by email directly:

For our clients residing in the Sarasota area, Cumberland Advisors knows nothing is more important than the safety of you and your family. We urge you to take the necessary steps to protect your loved ones. Check your supplies and make sure you have plenty of fresh water, flashlights, and a battery-operated radio. Cumberland values our customers’ security and peace of mind, and our goal is to provide outstanding service.
 
Thank you for entrusting us to continue to provide you service and may all stay safe.

 

John R. Mousseau quoted in this excerpt below...

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John R. Mousseau - In the News

 

Why You Should – or Should Not – Care About the Yield Curve

The disparity among different bond yields is often a predictor of recessions.

By Tim Smart - April 4, 2022

There’s plenty for investors and observers of the U.S. economy to worry about these days: inflation spiking at the highest pace in 40 years, a land war on the continent of Europe, an aggressive Federal Reserve hiking interest rates and political deadlock in Washington.

And then there’s the yield curve.

The curve is actually a line that measures the yield of various durations of bonds.

But last week, the 2-year had a yield higher than that of the 10-year. That means the yield curve was inverted.

Why Does This Matter?

Inverted yield curves reflect uncertainty about the future course of the economy and often serve as a warning sign of a coming recession, but not always.

Did the Fed’s actions create a distortion in the bond market?

John Mousseau, president, CEO and director of fixed income at Cumberland Advisors, notes that before the coronavirus arrived in the U.S. the 10-year Treasury yield was 1.9%. Then, it reached a low of 0.5% in August 2020 as the economy struggled.

“So, when compared to (the 1.9%), a 60-basis-point rise in rates seems more reasonable, particularly given that inflation has risen (though we also think we will see some retreat in inflation later in the year),” Mousseau added.

He also points out that market rates were already on the rise before the Fed moved in March, undercutting the notion that the recent uneasiness in the bond market is all a reaction to the central bank’s actions.

“We don’t think this is as much the market front-running the Federal Reserve as it is a reversion to the mean after COVID,” Mousseau added.

 

Read the full article at U.S. News & World Report: https://www.usnews.com/news/economy/articles/2022-04-04/why-you-should-or-should-not-care-about-the-yield-curve


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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.

 

 

John R. Mousseau, CFA
Published Date
News Source
U.S. News & World Report