2026 Cumberland Advisors Midyear Outlook

The bond markets have seen a significant rise in rates with the 10-year US Treasury bond yield rising from 3.95% at the end of February to 4.65% as we are finishing this outlook. The US economy in the first half of 2026 was hit by three negative forces – tariffs, geopolitics, and inflation – each shaping the Federal Reserve’s policy stance and the broader macroeconomic trajectory. Monthly changes to nonfarm payrolls ranged from a drop of 156,000 in February to a gain of 214,000 in March but averaged a monthly increase of 92,000 over the first half of the year. The S&P 500 Index climbed to a record high in early June, up by roughly 11 percent from the end of 2025. The US Treasury yield curve flattened during the first half of 2026 as short-term yields moved higher amid renewed inflation concerns and expectations that the Federal Reserve would maintain a restrictive policy stance for longer. Our midyear outlook is an overview of Cumberland Advisor’s thoughts on the financial markets. Clearly the overriding theme for the financial markets has been the war in Iran, which began at This article was written by David Kotok 2.77K Followers Follow David Kotok (Substack: https://dkotok.substack.com) co-founded Cumberland Advisors in 1973 and formerly was its Chief Investment Officer and Chairman. He is currently (2026) Strategic Advisor to Cumberland Advisors, LLC. David’s articles and financial market commentaries have appeared in The New York Times, The Wall Street Journal, Barron’s, and other publications. He has been a guest/contributor to Bloomberg TV and Radio, Yahoo Finance TV, and other media. He has co-authored five books, the newest one released in 2025, for details: www.thefedandtheflu.com . He holds a B.S. in economics from The Wharton School of the University of Pennsylvania, an M.S. in organizational dynamics from the School of Arts and Sciences at the University of Pennsylvania, and an M.A. in philosophy from the University of Pennsylvania.David was Program Chairman and a Director of the Global Interdependence Center (GIC), www.interdependence.org , whose mission is to encourage the expansion of global dialogue and free trade in order to improve cooperation and understanding among nation states, with the goal of reducing international conflicts and improving worldwide living standards. David chaired its Central Banking Series, and he organized a five-continent dialogue held in Cape Town, Hong Kong, Hanoi, Milan, Paris, Philadelphia, Prague, Rome, Santiago, Shanghai, Singapore, Tallinn, and Zambia (Livingstone). He has received the Global Citizen Award from GIC for his efforts. David is a member of the National Business Economics Issues Council (NBEIC). He is currently on the advisory board of RiskBridge Advisors. He has also served as a Commissioner of the Delaware River Port Authority (DRPA) and on the Treasury Transition Teams for New Jersey Governors Kean and Whitman. Additionally, he has served as a board member of the New Jersey Economic Development Authority and as Chairman of the New Jersey Casino Reinvestment Development Authority.