BSMT - 2025 Cumberland Advisors Fixed Income Markets Mid-Year Outlook

2025-07-15 07:10:00 ET

This is a brief overview of Cumberland Advisors’ thoughts on financial markets as we head into the second half of 2025. It is a particularly important outlook given the fact that we have just witnessed an almost unprecedented amount of presidential activity for the first 6 months of a new administration. With the recently passed budget bill, including tax discussions, tariffs and their implementation (and pullbacks), immigration policies, and discussions about the Fed chair, there has been no shortage of volatility in the markets, particularly at the beginning of the second quarter. As we started the second half of 2025, it was instructive to realize that the S&P 500 was 4.5% above where it was the day after the election and the ten-year Treasury bond yield was 4.28% vs. 4.45% the day after the election. But this masks the volatility we have seen. Overall, we do believe the economy is slowing down at the margin and that the Federal Reserve is on a path to cut short-term interest rates further, but probably not until later in the year when there is more clarity on tariffs and potential inflation....

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