Crypto: The Genius Act and More
Crypto, stablecoins, blockchain. I’ve hesitated to introduce these subjects into my writing because I think they are largely a distraction from what should be the prime focus of public funds investors, but the Genius Act, hailed by President Trump when he signed it last week as “making America the leader in digital assets” took me […]
What’s Behind the Decline in Growth of Public Funds Bank Deposits?
Bank deposits account for about 20% of the investment assets of state and local governments, a share that has declined in the recent years as local government investment pools and direct investment in Treasuries has grown. This concentration understates the importance of banks for smaller governments where deposits are often the only way to make […]
A New Bank Capital Rule: Why it Matters
In a nation of more than 4,500 depository institutions, why should it matter that Federal regulators have proposed a narrow rule that applies only to eight? The rule, proposed at the end of June by the Federal Reserve and other bank regulators, would ease the requirement that the largest banks maintain a capital buffer, with […]
Halftime: The Score for Public Funds Investments as of June 30
The first half of 2025 has been kind to public funds investors, delivering solid returns on short-term cash and historically high returns on longer-duration separate accounts. LGIP returns, while somewhat lower than in 2024, were close to generation highs, benefitting from the fact that the Federal Reserve has maintained an elevated federal funds rate. Individual […]
State and Local Government Investment Assets Continue to Grow Despite Economic and Fiscal Uncertainty
State and local government investment assets continued to expand in recent months, surpassing $4 trillion at the end of March, according to the Federal Reserve’s new quarterly report on the Financial Accounts of the United States. This was despite a rise in economic uncertainty and evidence of a fall-off in state and local government revenue […]
Repo: An Under-Appreciated Asset*
Repo—repurchase agreements if you will—is both simple and complex. Simple because once documentation is in place it’s quite easy to place a trade using a secure message, a trading platform or even—heaven forbid— a phone call. We used to joke that it was as simple as pushing the repo button. But the complexity is around […]
If Not Treasuries, Then What?
The downgrade by Moody’s of the credit of the United States has some folks thinking about whether to continue to invest in Treasuries. If you are a public funds treasurer the answer seems pretty simple, though the reasoning may be a bit complex/convoluted. For one thing, for most public agencies investment authority is limited to […]
Does it Matter? Moody’s Rating Downgrade of U.S. Sovereign Debt.
Moody’s Ratings’ downgrade of the credit of the United States on May 16 is not a major market moving event. Rather it is a sign along the path we are on, a path of rising sovereign debt loads and ineffective efforts either to control the growth or pay the cost of government. The seeds of […]
The Debt Ceiling Game is On
The X Date is live. We now have an idea of the date on which the United States will run out of money unless the debt ceiling is raised or suspended. Treasury Secretary Bessent informed Congress last week that it would be in August, thus teeing up a made up “crisis” that occurs periodically, grabs […]
Beyond the News—TBAC: Treasury and the Bond Dealers Do a Kabuki Dance
TBAC, the Treasury Bond Advisory Committee, is an obscure body. Even those immersed in the fixed income markets may not pay it much attention. But four times a year this group of bond dealer representatives meets with Treasury officials to provide input into the government’s massive and growing debt issuance plans. It’s a kind of […]