First Quarter Investment Returns: Cash Led the Way Again
• Local government investment pools and money funds once again produced market-leading returns in the 2024 first quarter. The beat by cash-type investments followed the strong showing for cash-type investments in 2023. • Returns of longer-duration portfolios were dragged down by a modest rise in interest rates. • The yield curve also worked against longer-duration […]
Public Sector Investment Assets Grew Strongly Last Year, Providing a Budget Cushion for States and Localities
The details. Investment assets grew by 7.5% last year, propelled by strong state and local tax collections, budget surpluses and investment earnings at rates that finished the year at their highest levels in a generation. The growth came after two years, 2020 and 2021, where Covid relief funds swelled state and local budgets. In that […]
More on Bank Capital Rules: The Fed Chair Speaks
If you were the CEO of one of the nation’s largest banks you might say that the most significant element of last week’s monetary policy report to Congress by Federal Reserve chair Jerome Powell was not about interest rates—“When will you cut them?”—or the state of the economy—“Are we in a recession or not?” Rather […]
Illinois LGIP Could Open a Pool for Non-Profits
Illinois by Nick Youngson CC BY-SA 3.0 Pix4free The Illinois Treasurer is seeking authority to create a local government investment pool for non-profit organizations. Senate Bill 3157 (and an identical bill in the House) would authorize a Non-Profit Investment Pool to operate in a manner similar to the Illinois Public Treasurer’s Pool (Illinois Funds), the […]
Local Government investment Pools: The Cash Keeps Flowing
Cash continues to pour into money funds and stable value local government investment pools. Assets of the stable value LGIPs rated by S&P Global grew by $71 billion or 23% in the 12 months ended February 9, 2024 to nearly $377 billion. Assets of money funds tracked by the Investment Company Institute rose to $6.001 […]
Basel III Endgame Could Change the Playing Field for Public Funds Investors
Opposition to the Basel III Endgame capital rules proposed by the federal bank regulators has intensified as the public comment period ended in mid-January, with new TV ads criticizing the proposal, a blizzard of comment letters filed with the regulators, and a flurry of Congressional hearings to warn of harm to bank lending if the […]
Prime Money Funds: How Changes Could Affect Public Funds Investors
Plans by a little-known money market fund to alter its investment strategy could be a harbinger of changes to the industry that have significant implications for public funds investors. The implications are three-fold: 1) state and local governments invest in money funds directly and some local government investment pools (LGIPs) invest in them as well, […]
Beneath the Surface: Market Volatility Remains
January was not a kind month for bonds. On the surface, all was well. LGIP rates were largely static in the month and the yield on the two-year Treasury—a good bell weather for separately managed public funds portfolios—ended the month not much above where it started. But beneath the surface heightened volatility prevailed. There is […]
Invest at Home: New Hampshire Bill Seeks to Rein in the state’s LGIP
Maybe it’s the current high level of interest rates that have disadvantaged banks; maybe it’s the growth of the New Hampshire local government investment pool, which more than doubled in size to $530 million in the year ending June 30, 2023. New Hampshire banks are pushing legislation that would rein in the New Hampshire Public […]
Recent Market Moves, LGIP Legislation in Nebraska and More. . .
This week’s Beyond the News has commentary on recent market moves, proposed local government investment pool legislation in Nebraska and a capital raise by Public Trust Advisors. Check out the updated Dashboard here. Recent Market Moves Have Had Almost No Effect on LGIP Yields The bond market has had a bumpy couple of months. Two […]