The Fed Said Nothing Has Changed Except. . . The Markets Are Happy, for Now.
Sometimes meetings of the Federal Open Market Committee bring great market changes, sometimes not. Yesterday’s meeting was a Not. Bottom line: the Fed said not much and investors, skittish over market direction, were relieved, with both equities and bonds rising in price after the meeting’s concluding announcement. Most public funds investors limit their involvement to […]
A Bond Fund that Isn’t
If you ask a local government investor what additional offering they might use, they often respond that it would be a fund that invests in longer-maturity investments but allows them to redeem their shares at par whenever they want. Anyone who has taken Investments 101 knows that this is (usually) an impossibility. Investing beyond the […]
Unsettled Times, So Hunker Down
Last week’s Research Note “The R Word” perhaps seemed a bit off track to some folks, but the above chart, published Friday by the Atlanta Federal Reserve, captured a lot of eyes. It looks eerily like the same chart in the first quarter of 2020 when Covid shut down the markets and the economy in […]
Coda: About Federal Agencies; the Debt Ceiling Game; and FDIC Insurance
Coda: Another Observation About Federal Agency Debt The last issue of Beyond the News described the changes in debt issuance by federal agencies since the Great Recession, noting three key points: (1) shrinkage in the amounts issued by Fannie Mae and Freddie Mac, (2) a sharp reduction in the volume of short-term discount notes issued, […]
Federal Agencies: Oh, for The Good Old Days
There was a time when it was easy to outshine a Treasury investment with little risk. Federal agency debt was the key. That time is long gone, a consequence of the financial crisis and the Great Recession of 2008. The result diminished, perhaps forever, the role of federal agencies that had been a lynchpin of […]
Treasuries: Ya Gotta Love Em
Treasuries are the rarest of birds and also the most common. Rare because they are universally accepted as a safe haven for investment, and the most common because they are in abundant supply. If you don’t like them as they are, well then, the price will go down. And don’t worry about supply: you can […]
Beyond the News: So, What is Next?
Top of mind recently has been the importance of portfolio liquidity. I’ve commented on this several times in recent posts—most recently in last week’s note on the changes in state and local government investment portfolios reported in the Federal Reserve’s release on Financial Accounts of the United States. The events this week could not be […]
An Update on Bank Regulations: The Dead Parrot Sketch*
If there were any doubt, the resignation last week of Michael Barr as vice chair for supervision of the Federal Reserve signals that the effort to tighten capital and supervision rules for banks is dead. Barr was the point person in this effort, and in post-election comments he and Federal Reserve chair Jerome Powell had […]
Welcome to 2025, the Year of Heightened Uncertainty
A new year often brings uncertainty but for public funds investors the start of 2025 stands out. On top of the usual questions about financial market trends a couple of things amplify ambiguity. While all investors are subject to these forces, public sector investors are particularly vulnerable. States and localities count on Washington for about […]
A Good Year for Public Funds Investors
It’s been a good year for public funds investors. You can access indices and other current information on the Investment Dashboard here. Meanwhile, reflect on this question: Are interest rates higher or lower than a year ago? As economists are wont to say, “It depends.” Short-term yields are significantly lower. The Federal Reserve’s policy […]