Countdown to Shutdown
A Federal government shutdown heightens uncertainty; Moody’s climbs on board, and more in this week’s Beyond the News.
LGIP Investment Strategies Presume A Pace of Slow Monetary Policy Tightening
Local government investment pools extended maturities in recent weeks, anticipating the shift in Federal Reserve monetary policy that reduced the pace of tightening after the sharp run-up in interest rates over the past 18 months. Pool portfolios moved from very short weighted average maturities (WAMs) in the spring and are now positioned for limited moves higher in interest rates in the near term. Meanwhile pool yields have risen to fully reflect current market conditions.
Federal Home Loan Banks Under Review
A Federal review of the Federal Home Loan Banks is coming up; also new bank capital rules; and a government shutdown?
LGIP Trends: Higher Yields, Plateauing Assets, a Bit More Risk
Moderating asset growth, higher yields, and a move to a somewhat less defensive market risk position sum up local government investment pool fundamentals in the second quarter.
Seems Like Banks Just Can’t Stay Out of the Headlines
Last week Moody’s took ratings action on 27 US banks. This week (so far) the chairman of the Federal Deposit Insurance Corporation announced that his agency would issue regulations requiring that large regional banks (assets greater than $100 billion) adopt “living wills” to facilitate resolution in the event they become insolvent. And FitchRatings warned that it could downgrade dozens of US banks.
Fitch Ratings Downgrades US Sovereign Rating; Immediate Impact on Public Funds Investments is Limited
Fitch Ratings Downgrade of US Debt should have limited immediate impact on pubic funds investments
Early Alert: Government Shutdown May be the Next Challenge
Could a government shutdown complicate things for public funds investors?
Will Banks Compete for Your Deposits?
Have bankers called you recently? Bank deposits have trended down recently, and money fund assets have risen. Now banks are gearing up to build them back up.
Beyond the News Issue #4
This week: The SEC adopted new rules to strengthen the resilience of money market funds, but they may also further hamper the operation of institutional prime funds. Local government investment pools are not subject to these rules. but in a Spotlight piece to be released next week we’ll analyze some of the important implications for LGIPs. We also note an update from Fitch Ratings on its negative outlook for the AAA rating for the United States.
See you next week!
Beyond the News: Issue #3
Read the latest on the end of LIBOR, the introduction of SOFR, and the implications for public funds portfolios. Stay informed about money market reform and potential bank consolidation in the industry.