The Institutional Risk Analyst

New York | In this issue of The Institutional Risk Analyst, we feature a market comment from Robert Eisenbeis, Vice Chairman & Chief Monetary Economist at Cumberland Advisors. Dr. Eisenbeis asks: Why is the stock market showing more volatility than bonds? Why indeed. He concludes with a typically concise summation: "The lesson here for stock market investors is that hoping for a rate hike as a substitute for considered analysis is not a good strategy." On Wednesday, the FO

By any standard, credit spreads in the US bond and loan markets remain very tight. Now several years into a Fed interest rate tightening cycle, short-term interest rates are rising but spreads do not expand. A year ago the two year was yielding 1.35%, but today is 2.6%. The 10-year Treasury note, on the other hand, has barely moved in a year, 2.2% then vs 2.85% today. Last we looked, Treasury 2s vs 10s was 25bp compared to almost a point a year ago. What a flattening yiel