Generated by All in One SEO v5.0.0.1, this is an llms.txt file, used by LLMs to index the site.

# Public Funds

Investment Institute

## Sitemaps

- [XML Sitemap](https://pubfunds.org/sitemap.xml): Contains all public & indexable URLs for this website.

## Posts

- [Whatever it Takes. The Warsh FOMC](https://pubfunds.org/whatever-it-takes-the-warsh-fomc/) - Kevin Warsh’s news conference at the conclusion of the Federal Open Market Committee meeting on Wednesday revealed two things: Warsh may say he’s abandoned the Fed’s “forward guidance” approach to monetary policy but in reality, he seems to have doubled down on the application of words, rather than actions, to steer the economy. Rather than
- [Decoding Kevin Warsh](https://pubfunds.org/decodinng-kevin-warsh/) - Twice a year the chair of the Federal Reserve testifies before Congress on monetary policy. It’s a requirement that stems from 1978 legislation that provides accountability and oversight of the independent central bank. This week’s sessions provided some insights into principal elements of monetary policy that are not ordinarily in the rate-setting headlines that monopolize
- [Is Crypto in Your  Future?](https://pubfunds.org/is-crypto-in-your-future/) - Crypto was a hot topic at spring and annual conferences of many government associations as industry advocates swarmed to gain attention and government officials sought to understand if/whether/how crypto might be implemented in their organizations. The buzz is long on promise and concept but short on real experience. Crypto assets are barely a rounding amount
- [Banks Have Changed Their Business Model and Public Funds Investors Are Implicated](https://pubfunds.org/banks-have-changed-their-business-model-and-public-funds-investors-are-implicated/) - There was a time when banks seemed to dominate the public funds investment world. For the thousands of small and mid-sized local governments they were the go-to source of investment income. When a city, town or school district had money to invest, they sought bids from banks, placed the funds with the one offering the
- [Halftime: What's in Store for the Balance of 2026?](https://pubfunds.org/halftime-whats-in-store-for-the-balance-of-2026/) - Last week’s Crane Money Fund Symposium brought together portfolio managers who invest assets in the $8 trillion money market fund industry along with those who invest portfolios for the major banks. It’s a small number of people whose views on the economy and investment markets are incredibly important in setting the course for short-term
- [Transparency:  The Fed’s Mandate](https://pubfunds.org/transparency-the-feds-mandate/) - Federal Reserve Chair Kevin Warsh’s post Federal Open Committee meeting news conference got me thinking about how much information transparency has shaped the financial markets since I entered the business nearly 50 years ago, and the implications if the Fed moves to reduce transparency and access to information by ordinary investors, including those who manage
- [Why the Director of National intelligence is Involved in the Federal Agency Market](https://pubfunds.org/why-the-director-of-national-intelligence-is-involved-in-the-federal-agency-market/) - It may not be immediately apparent, but President Trump’s naming Bill Pulte Interim Director of National Intelligence has implications for the Federal agency market where $450 billion of public funds are invested. Before you dismiss this as crackpot, consider: Pulte is also the head of the Federal Housing Finance Agency and chairman of both Fannie
- [An Update on Credit](https://pubfunds.org/an-update-on-credit/) - In November we wrote about cracks appearing in credit, cautioning investors that emerging risks could expose corporate bonds and commercial paper to losses and drag down returns of portfolios that hold them. Six months later the cracks have not expanded. Nor have they healed. But risk premiums for both investment grade and high yield credit
- [Ya Wanna Bet?  The Rising Place of Prediction Markets in Investing](https://pubfunds.org/ya-wanna-bet-the-rising-place-of-prediction-markets-in-investing/) - Would you go to a betting parlor to invest? Before you answer, consider: Betting on predictions and investing have a lot in common. Investors regularly use the vernacular of betting to describe market activities. We make “bets” on relative value, the future direction of interest rates and the likelihood that an investment we make might
- [Why Five Percent Yield on the 30 Year Treasury is a Big Deal](https://pubfunds.org/why-five-percent-yield-on-the-30-year-treasury-is-a-big-deal/) - The yield on the 30-year Treasury bond broke above five percent this week, and it’s kind of a big deal. It’s not that five percent triggered some pre-set realignment in the financial markets, or that the level resulted in a quantum change in gains, losses or winning and losing positions as compared with those positions
- [Sometimes No News Is News](https://pubfunds.org/sometimes-no-news-is-news/) - The numbers are staggering. Last year Treasury issued $30.5 trillion of securities to fund the national debt. That’s nearly $600 billion a week. This year, through April issuance was $10.8 trillion, 10% ahead of the 2025 pace. Most of this is to refund/rollover existing debt but some is for new debt that will be required
- [Beyond the Fed:  Why This Week’s Events May Be Less important than You Think](https://pubfunds.org/beyond-the-fed-why-this-weeks-events-may-be-less-important-than-you-think/) - I’m guilty of having spent a good deal of time over the last two weeks on the eye-catching news on interest rates: the Senate hearing on whether to confirm Kevin Wash as the next chair of the Federal Reserve, the move by the Department of Justice to end a criminal probe of Jerome Powell,
- [Kevin Warsh: Behind the Senate Testimony of the Federal Reserve Nominee](https://pubfunds.org/kevin-warsh-behind-the-senate-testimony-of-the-federal-reserve-nominee/) - Beyond the sound bites from this week’s Senate Banking Committee hearing on the nomination of Kevin Warsh to chair the Federal Reserve are three issues that are much more important for the markets and economy than whether President Trump or his political adversaries “win” or “lose” this latest contest of political will. They are shrouded
- [Solid Growth of Investment Assets in 2025 Helped Support State and Local Government Budgets](https://pubfunds.org/solid-growth-of-investment-assets-in-2025-helped-support-state-and-local-government-budgets/) - State and local government investment assets grew at a strong pace in 2025, extending a trend that goes back to the pre-covid era. Data released by the Federal Reserve last month showed investment assets ended last year at $4.05 trillion, up from $3.8 trillion in 2024. The five percent growth rate was ahead of the
- [First Quarter Investment Returns: Lessons Learned](https://pubfunds.org/first-quarter-investment-returns-lessons-learned/) - It was not supposed to be this way. At the start of 2026, many investors were looking forward to declining short-term rates, with the Federal Reserve continuing to cut the federal funds rate to three percent by year-end. Some prominent economists forecast rates with a two percent handle by December. Longer-maturity investments, including two-year Treasuries
- [Not Much Has Changed, Or Has It?](https://pubfunds.org/not-much-has-changed-or-has-it/) - It’s hard to see beyond the Iran war. That’s true of it’s humanitarian, but also of its economic/financial market effects. Not much has changed in a week besides the rhetoric. Or at least that’s the case if you look at the four factors that I illustrated in a recent issue of Beyond the News. Oil
- [Beware the Ides of March](https://pubfunds.org/beware-the-ides-of-march/) - Yesterday’s Federal Open Market Committee meeting concluded with no change. Or did it? While the committee voted 11 to 1 to keep rates unchanged and released its quarterly Summary of Economic Projections with only modest tweaks, it also came at a time of a significant swing in market sentiment. Point to oil. At this writing
- [Iran War: What to Watch](https://pubfunds.org/iran-war-what-to-watch/) - You don’t need extensive data analysis to know that the Iran War has become the force behind every tick in the financial market. Indeed, data can overwhelm to the point where it is difficult to discern reality. What to follow? Below are four factors that I’m focused on, with charts that you can find or create
- [Iran and Interest Rates](https://pubfunds.org/iran-and-interest-rates/) - What impact will the Iran war have on short-term markets? The headlines have been all about oil prices. They are up, and that’s important, but it is not the whole story. • Oil prices will affect inflation, though the effect is not straightforward. • The biggest impact on the markets is that the war heightens
- [Calm or Complacent: Short Term Markets Are Uncertain](https://pubfunds.org/calm-or-complacent-short-term-markets-are-uncertain/) - You might think that the recent news on the economy would lead to big market moves. Tariffs—on, off or . . ., a partial government shutdown (again), a 20% swing in oil prices since September, the sharp rise in the price of gold, a new Federal Reserve chair in waiting. And President Trump continues to
- [Banks vs. LGIPs: The Saga Continues](https://pubfunds.org/banks-vs-lgips-the-saga-continues/) - Banks don’t like local government investment pools. Except for those banks that provide investment management, payment services, custody, or brokerage services to LGIPs. These include the nation’s largest banks (think JP Morgan, Bank of America, BNY, US Bank, State Street). But the rest, particularly the 4,000 or so community banks, are fierce competitors.Banks and LGIPs
- [Move to Expand Deposit Insurance Gains Momentum](https://pubfunds.org/move-to-expand-deposit-insurance-gains-momentum/) - A proposal to increase federal bank deposit insurance to $10 million on non-interest-bearing transaction accounts in community and regional banks has gained momentum in Congress and with the Trump administration. If enacted, it would raise the limit on transaction accounts for businesses and municipalities from its current $250,000 limit. This could eliminate the need to secure
- [Where Next? A Review of Recent Investment Performance](https://pubfunds.org/where-next-a-review-of-recent-investment-performance/) - Short/intermediate term fixed income portfolios have had strong returns recently. For the past 18 months or so as the Federal Reserve eased monetary conditions and interest rates fell they out-performed local government investment pools and other cash investments by a healthy margin.In the 12 months ending January 2026 our 1-3-year model portfolio returned 5.08%. That
- [Sell America, Buy Gold](https://pubfunds.org/sell-america-buy-gold/) - That’s a headline that is bound to grab eyeballs, but is there truth to it? And if so, what does it mean for state and local governments investors? Sell America is a great line for pundits that may have roots in financial market reality. Large and growing federal deficits could lead foreign investors to sell
- [LGIP Disclosure and Transparency: What Investors Are Missing](https://pubfunds.org/lgip-disclosure-and-transparency-what-investors-are-missing/) - Last November we released results of our annual survey of local government investment pools, which covered 161 pools with nearly $1 trillion in assets. One observation we made in that report was that LGIPs lack uniform disclosure/transparency with the result that self-governance within the industry is challenging and investors are limited in their ability to
- [How Trump’s $200 Billion Mortgage Purchase Order May Affect Public Funds Investors;  LGIPs: New Pools and Manager Changes](https://pubfunds.org/how-trumps-20-billion-mortgage-purchase-order-may-affect-public-funds-investors-and-lgips-new-pools-and-manager-changes/) - I try to limit Beyond the News to single issues but this week we’re covering two that I think are very timely. First, some observations on Trump’s social media post last week that he had ordered his “representatives” to purchase $200 billion of mortgage bonds in an effort to boost housing; second, reports on two
- [Recap of 2025: The Benefit, and Limits, of Hindsight](https://pubfunds.org/recap-of-2025-the-benefit-and-limits-of-hindsight/) - Hindsight is (usually) 20:20. With that in mind here’s a recap of how public funds investment strategies performed in 2025.• Longer was better, with a modest decline in interest rates boosting returns of public agency portfolios invested beyond the cash space and dragging down the returns of local government investment pools and money market funds.•
- [New Bank Capital Requirements: A Credit Negative and More](https://pubfunds.org/new-bank-capital-requirements-a-credit-negative-and-more/) - When the Federal Reserve and other bank regulators approved changes to the capital requirements for the nation’s largest banks last month it represented the culmination of a years-long campaign by the banking industry to push back on what they viewed as regulatory over-reach. Consumer groups argued otherwise. What’s interesting is not who’s on top at
- [A Bill to Expand Federal Deposit Insurance Would Benefit State and Local Governments](https://pubfunds.org/a-bill-to-expand-federal-deposit-insurance-would-benefit-state-and-local-governments/) - Securing public funds bank deposits is normally not top of mind. Nor is it the prime responsibility of any official—until something goes wrong. When that happens taxpayer money can be lost and municipal officials will be on the hotseat.That was the case in Oklahoma when a small bank became insolvent last year. The Federal Deposit
- [Is Monetary Policy Broken?](https://pubfunds.org/is-monetary-policy-broken/) - This may appear to be a bit wonky for some public funds investors who have more important things on their minds but bear with me. The implications of a breakdown in monetary policy are dire for investment markets and for the macroeconomy.The headlines for next week’s Federal Open Market Committee meeting will be about rates.
- [Cracks Are Appearing in the Credit Markets](https://pubfunds.org/cracks-are-appearing-in-the-credit-markets/) - Cracks are appearing in the credit markets and public funds investors should amp up risk management efforts or avoid the risks that could upend portfolio strategies at a time when economic uncertainty, falling short term interest rates and disruption to historic government funding could stress state and local government budgets. There are two stories here:
- [2024 LGIP Survey:  LGIPs Hold Nearly $1 Trillion  of Public Funds](https://pubfunds.org/placeholder-title/) - Our annual survey of local government investment pools is out. This year we expanded our survey to include local sponsored LGIPs. In total we identified 161 portfolios. They operate in all but seven states. The survey is the only comprehensive look at the LGIP industry which invests assets for thousands of public units across the
- [What to Expect in a Government Shutdown](https://pubfunds.org/what-to-expect-in-a-government-shutdown/) - I have no idea what the outcome of the government shutdown will be. There is no predicting, and any forecasts are laden with political overtones. But it seems useful to look back at the effects of the last prolonged shutdown, December 2018-January 2019, to see how the economy and financial markets responded. That shutdown lasted
- [Bank CDs:  Available for Investment, But is There Value?](https://pubfunds.org/bank-cds-available-for-investment-but-is-there-value/) - States and localities have long invested in bank certificates of deposit because they are familiar, easy to acquire and may be viewed as serving the community. In most cases the issuing bank must collateralize the deposit, so CDs are viewed as having low risk. But changes in the bank business model may have made this
- [The Upcoming FOMC Meeting: Lower Rates Likely](https://pubfunds.org/the-upcoming-fomc-meeting-lower-rates-likely/) - The October meeting of the Federal Open Market Committee is likely to produce two results that will lower rates for public funds investors.• The Fed seems set to lower its main policy rate by 25 basis points. Rates for short-term investments like Treasury bills, commercial paper and collateralized certificates of deposit have already dropped to
- [State-Sponsored Local Government Investment Pools: Trends and Opportunities](https://pubfunds.org/state-sponsored-local-government-investment-pools-trends-and-opportunities/) - An overview of state-sponsored local government investment pools and an engaging discussion of current issues, trends, and opportunities. That is the content of a webinar organized by the National Association of State Treasurers earlier this week. The webinar was moderated by the Hon. Mike Pellicciotti, Washington State Treasurer. I participated along with Stuart Williams, Director
- [What to Do When the Fed Moves](https://pubfunds.org/what-to-do-when-the-fed-moves/) - The Federal Reserve is on the cusp of lowering short-term interest rates. Softening labor markets, inflation that has not (yet?) reacted to the new tariff regime and unrelenting political pressure from the Trump Administration are likely to lead the central bank to resume its easing later this month. (No, the Fed is not immune to
- [State and Local Government Investment Assets Show Growth  Despite Economic and Fiscal Uncertainty](https://pubfunds.org/state-and-local-government-investment-assets-show-growth-despite-economic-and-fiscal-uncertainty/) - State and local government investment assets grew by $110 billion, to $4.1 trillion in the second quarter of 2025, a surprisingly strong pace given the high level of economic and political uncertainty. • The growth of three percent in the quarter and eight percent in the 12-month period extends a trend of expanding investment assets
- [Why the Yield on the 10-Year Treasury Matters](https://pubfunds.org/why-the-yield-on-the-10-year-treasury-matters/) - There are several reasons to keep a close eye on the yield of the 10-year Treasury note even though investing out 10 years is far beyond the horizon for most public funds portfolios. Ten-year Treasuries make up less than one percent of Treasury’s $37 trillion of outstanding debt. Yet the yield on this maturity has
- [Cliff Notes on the Upcoming Federal Open Market Committee Meeting](https://pubfunds.org/cliff-notes-on-the-upcoming-federal-open-market-committee-meeting/) - Next week’s meeting of the Federal Open Market Committee is almost certain to set short-term interest rates firmly on the road to lower. That much is given. But it will also mark the debut of a new, more political Fed and provide important guidance for investors to assess the forward path of the U.S. (and
- [The Jobs Number](https://pubfunds.org/the-jobs-number/) - I generally try to write about matters that are particularly relevant to public funds investors but this piece is more general. Macroeconomic matters affect us all. As I read through Congressional Budget Office analysis of the budget/deficit situation last week I was struck by the importance of underlying trends in population, labor force and productivity.
- [An Update on Privatizing Fannie and Freddie](https://pubfunds.org/an-update-on-privatizing-fannie-and-freddie/) - There is nothing like a Trump Truth Social post to grab attention. That was the result when an AI generated image of the President ringing in a listing of stock of the Great American Mortgage Corporation (Ticker “MAGA”) 10 days ago put the future of Fannie Mae and Freddie Mac in play. These government sponsored
- [Waking Up to Lower Rates](https://pubfunds.org/waking-up-to-lower-rates/) - Last week was supposed to be a big one for the financial markets, though perhaps not quite the way it turned out. A meeting of the Federal Open Market Committee and release of the monthly jobs report were on the schedule, and the smart money was betting that the Fed would pass on cutting
- [Supply, Supply, Supply](https://pubfunds.org/supply-supply-supply/) - Supply. The short-term markets will be inundated with Treasury bills in coming months as the Treasury refills its cash account, manages seasonal revenue flows and…oh yes, funds the deficit.• The Treasury’s quarterly refunding announcement this week laid out a plan to increase issuance of Treasury bills and short-term notes—those maturing within five years—by nearly $1.1
- [Crypto: The Genius Act and More](https://pubfunds.org/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?](https://pubfunds.org/whats-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](https://pubfunds.org/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](https://pubfunds.org/halftime-the-score-for-public-funds-investments-as-of-june-30/) - Short term fixed rate investments offered yields in January that were somewhat lower than those on LGIPs, and those maturing in less than six months exposed investors to reinvestment risk during the period. As of June 30, the annualized returns were very close to those on LGIPs. For example investing at the rates of the
- [State and Local Government Investment Assets Continue to Grow Despite Economic and Fiscal Uncertainty](https://pubfunds.org/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*](https://pubfunds.org/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?](https://pubfunds.org/beyond-the-news-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 US
- [Does  it Matter? Moody’s Rating Downgrade of U.S. Sovereign Debt.](https://pubfunds.org/does-it-matter-moodys-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
- [The Debt Ceiling Game is On](https://pubfunds.org/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
- [Research Note:  The R Word](https://pubfunds.org/research-note-the-r-word/) - This is a wonky post, and I hope it is not out of reach to some readers, but I think it’s important to provide context to the current market. Sentiment in the bond market has undergone a subtle shift in the past couple of weeks with some investors now expecting a slowing economy. And
- [A New LGIP in Georgia; FSOC Action is Telltale of Important Changes in Financial Markets](https://pubfunds.org/this-week-in-beyond-the-news/) - A new LGIP Portfolio to open in Georgia; Financial Stability Oversight Council Action is a telltale of big changes in the financial markets.
- [Coda: About Federal Agencies; the Debt Ceiling Game; and FDIC Insurance](https://pubfunds.org/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,
- [Unsettled Times, So Hunker Down](https://pubfunds.org/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
- [A Bond Fund that Isn’t](https://pubfunds.org/a-bond-fund-that-isnt/) - 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
- [The Fed Said Nothing Has Changed Except. . . The Markets Are Happy, for Now.](https://pubfunds.org/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
- [Beyond the News—TBAC: Treasury and the Bond Dealers Do a Kabuki Dance](https://pubfunds.org/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
- [Why Do Investors Discount Credit Risk?](https://pubfunds.org/why-do-investors-discount-credit-risk/) - The markets are awash in headlines about economic uncertainty and the rising prospect of recession, but these forces have barely moved measures of credit risk.Credit backed instruments are a significant part of public funds portfolios. The Federal Reserve estimates that state and local governments held $561 billion of commercial paper and corporate bonds at the
- [Beyond the News: Risk, The New Obsession.](https://pubfunds.org/beyond-the-news-risk-the-new-obsession/) - I’ve been thinking a lot about risk these days, and so should you. Some investment folks are paid to bet on risk (think hedge fund managers). For them, more risk is better—they just want to bet on the right side. But almost without exception public funds investors are expected to avoid risk, or at least
- [Something’s Up in Texas](https://pubfunds.org/somethings-up-in-texas/) - Local government investment pools have flourished in Texas and its local governments have benefitted from the highly competitive marketplace that provides a myriad of options, many at very low cost. But recently the industry has attracted the attention of state legislators who have introduced bills that would alter the landscape, likely to the detriment of
- [New Research Report Details the Role of State-Sponsored Local Government Investment Pools as the Foundation of a $900 Billion Industry](https://pubfunds.org/new-research-report-details-the-role-of-state-sponsored-local-government-investment-pools-as-the-foundation-of-a-900-billion-industry/) - A new research report by the Public Funds Investment Institute details the role of state treasurer-sponsored local government investment pools as a foundation of the $900 billion industry that provides money market-like investments to state and local governments. State treasurers in 32 states offer these funds and their assets total nearly $700 billion. Local-sponsored LGIPs with an estimated $200 billion
- [The Week After](https://pubfunds.org/the-week-after/) - You can’t ignore the massive market selloff last week, even if cash pools and short-term fixed income portfolios escaped the worst. Equity markets bore the brunt, losing 10-15%. (That selloff continued this morning.) By contrast the fixed income markets seemed a calm and sheltered place. Yes, bond yields fell but the change in short term
- [New Bank CD Benchmarks Provide Transparency to The Market](https://pubfunds.org/new-bank-cd-benchmarks-provide-transparency-to-the-market/) - The collateralized CD market has been a black box for public agencies, where useful information on rates has been hard to come by and public agencies are hampered in assessing relative value. We’ve created a series of new investment benchmarks to address this by tracking rates that banks pay for collateralized public funds deposits. It
- [Public Sector Financial Assets Continue to Grow, Even as the Economy Slows](https://pubfunds.org/spotlight-1/) - Covid-19 revenue and spending patterns fueled strong growth in public funds investment balances over the past several years, and recent Federal Reserve data show that investment balances continued to expand this year to $3.7 trillion as of March 31, 2023.
- [Beyond the News: Issue #1](https://pubfunds.org/news-1/) - Beyond the News this week covers bank regulations, the status of the SEC’s Money Market Reform proposal and a quick comment on Crypto.
- [Beyond the News: Issue #2](https://pubfunds.org/news-2/) - We start this week with a comment on the Federal Reserve’s annual bank stress test results, released June 28th—not because they held any real surprises but because they clear the deck for the next act during which the banks, the regulators, and perhaps Congress, will arm wrestle over changes to capital requirements and bank supervision. This could lead to a major alteration in the bank landscape for depositors and investors. There is also the July 1 rollout of FedNow, the new 24/7 payment system. And finally, a bow to money market yields, now largely north of 5%.
- [Beyond the News: Issue #3](https://pubfunds.org/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.
- [Beyond the News Issue #4](https://pubfunds.org/money-market-fund-reform-seeks-to-better-protect-investors/) - 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!
- [Will Banks Compete for Your Deposits?](https://pubfunds.org/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.
- [Early Alert: Government Shutdown May be the Next Challenge](https://pubfunds.org/early-alert-government-shutdown-may-be-the-next-challenge/) - Could a government shutdown complicate things for public funds investors?
- [Fitch Ratings Downgrades US Sovereign Rating; Immediate Impact on Public Funds Investments is Limited](https://pubfunds.org/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
- [SEC Money Fund Reforms Raise Important Issues for LGIPs](https://pubfunds.org/sec-money-fund-reforms-raise-important-issues-for-lgips/) - The SEC's recently adopted money fund reform rules should lead LGIPs to consider whether to make similar changes to their operations
- [Seems Like Banks Just Can’t Stay Out of the Headlines](https://pubfunds.org/seems-like-banks-just-cant-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.
- [LGIP Trends: Higher Yields, Plateauing Assets, a Bit More Risk](https://pubfunds.org/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.
- [Federal Home Loan Banks Under Review](https://pubfunds.org/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?
- [Public Sector investment Assets:  Stability and Liquidity Prevail](https://pubfunds.org/public-sector-investment-assets-stability-and-liquidity-prevail/) - Investment assets of state and local governments have grown slowly in recent quarters despite a sharp rise in interest rates that adds income to portfolios at the highest rate in more than a decade. A Federal Reserve report, released last week, showed public sector investment assets at $3.7 trillion, almost unchanged from the level reported for March 31...
- [LGIP Investment Strategies Presume A Pace of Slow Monetary Policy Tightening](https://pubfunds.org/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.
- [Countdown to Shutdown](https://pubfunds.org/countdown-to-shutdown/) - A Federal government shutdown heightens uncertainty; Moody's climbs on board, and more in this week's Beyond the News.
- [The Surge in Bond Yields—Big Deal or Not?](https://pubfunds.org/the-surge-in-bond-yields-big-deal-or-not/) - The recent surge in long term yields may signal a big change in the outlook for the US and global economies.
- [Recent Moves by LGIP and Money Fund Managers Support View that Fed is Nearly Done Tightening](https://pubfunds.org/recent-moves-by-lgip-and-money-fund-managers-support-view-that-fed-is-nearly-done-tightening/) - Money market fund and local government investment pool managers have been re- positioning portfolios on the assumption that the Federal Reserve is near the end of its tightening cycle. The moves have taken place incrementally over the past several months as the “nearly done” mantra suffused the market.
- [Cybersecurity:  Board and Management Responsibilities in a Risky World](https://pubfunds.org/cybersecurity-board-and-management-responsibilities-in-a-risky-world/) - October is cybersecurity awareness month. Public sector investment programs, no matter what their size, are a prime target for cybercrime. This research note focuses on the responsibilities of investment program managers (treasurers, chief investment officials and members of oversight boards) related to cybersecurity.
- [Are LGIPs a Safe Harbor from Bond Market Volatility?](https://pubfunds.org/are-lgips-a-safe-harbor-from-bond-market-volatility/) - With financial news headlines screaming Treasury market volatility and commentators warning that the sharp rise in interest rates could cause dangerous market dislocations, one might wonder about the stability of money funds and LGIPs.
- [Is It Time to Go Long?](https://pubfunds.org/is-it-time-to-go-long/) - With all the talk of higher interest rates, unexpected strength in the US economy and an unsettled political situation here and globally, is now the time to go long? For the past two years cash-like investments (especially stable value LGIPs) have been the winners as rising interest rates produced losses in bond portfolios, but at some point the tide will change. For public funds investors, where “long” means two- or three-year maturities now may be that time.
- [FHL Banks at 100--How the Opportunities for Public Funds Investors May Change](https://pubfunds.org/fhl-banks-at-100-how-the-opportunities-for-public-funds-investors-may-change/) - The Federal Housing Finance Agency this week released its long-promised review of the FHL Banks which aims to sharpen the focus on supporting housing finance and community development and avoid becoming a lender of last resort for banks and other financial institutions.
- [Moody’s Makes it Three](https://pubfunds.org/moodys-makes-it-three/) - Late last week Moody’s Investors Service announced a change in the outlook on US government ratings to negative from stable. This signals that the triple-A rating of United States debt could be lost in coming months.
- [Public Funds Investment Portfolios:  Steady with Little Growth Expected](https://pubfunds.org/public-funds-investment-portfolios-steady-with-little-growth-expected/) - Public funds investment assets have barely expanded this year, despite robust interest earnings that flow to investment portfolios. This is according to newly released Federal Reserve data. The Fed reports that investment assets totaled $3.7 trillion at the end of the third quarter, up $100 billion from December 31, 2022. The growth rate of 2.9% for the nine-month period is less than the pace of economic growth (GDP was up 4.5%) and about even with the rate of inflation. This followed growth of investment assets of 40% between 2018 and the end of 2021.
- [Big Market Move Means Different Things for Different Folks](https://pubfunds.org/big-market-move-means-different-things-for-different-folks/) - The big market news last week was a strong rally that pushed most interest rates down by 30-40 basis points. To see what it meant for public fund investors, check out the updated Dashboard. Here are highlights: ● The market rally, which pushed down interest rates of most tenors by about 30 basis points,
- [And the Winner Is?](https://pubfunds.org/and-the-winner-is/) - A Recap of 2023 Investment Results The PFII Dashboard has been updated. See it here. The sharp rise in rates over the year just ended resulted in strong returns for LGIPs and money funds. We estimate that the full year returns for LGIPS were in the range of 5.10% to 5.30%. (The lack of consistent
- [2024 Investment Environment:  Treasuries on Top](https://pubfunds.org/2024-investment-environment-treasuries-on-top/) - The year begins with a fresh look at the public funds investment universe. Since most public sector investment policies limit investments by maturity and quality we focus on the universe of high-quality investment grade securities with maturities of three years or less. Excluded are foreign-issued securities and corporate bonds rated less than A. The big
- [Recent Market Moves, LGIP Legislation in Nebraska and More. . .](https://pubfunds.org/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
- [Invest at Home:  New Hampshire Bill Seeks to Rein in the state’s LGIP](https://pubfunds.org/invest-at-home-new-hampshire-bill-seeks-to-reign-in-the-states-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
- [Beneath the Surface: Market Volatility Remains](https://pubfunds.org/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
- [Prime Money Funds: How Changes Could Affect Public Funds Investors](https://pubfunds.org/prime-money-funds-how-changes-could-alter-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,
- [Basel III Endgame Could Change the Playing Field for Public Funds Investors](https://pubfunds.org/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
- [Local Government investment Pools:  The Cash Keeps Flowing](https://pubfunds.org/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
- [Illinois LGIP Could Open a Pool for Non-Profits](https://pubfunds.org/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
- [More on Bank Capital Rules:  The Fed Chair Speaks](https://pubfunds.org/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
- [LGIPs Shun New Money Fund Liquidity Rule: What it Means for the Industry](https://pubfunds.org/lgips-shun-new-money-fund-liquidity-rule-what-it-means-for-the-industry/) - The big picture. A requirement that raises the liquidity threshold for money market funds under the Securities and Exchange Commission’s Rule 2a-7 is effective in early April. Local government investment pools are exempt from the rule and those that advertise they are “Rule 2a-7 like” have given no sign that they will follow this new
- [Public Sector Investment Assets Grew Strongly Last Year, Providing a Budget Cushion for States and Localities](https://pubfunds.org/public-sector-investment-assets-grew-strongly-last-year-providing-a-budget-cushion-for-states-and-localities/) - State and local government investment assets grew at a solid pace, ending 2023 at $3.7 trillion, up 7.5% in the year, according to new estimates released by the Federal Reserve. Assets have grown by more than $1 trillion since 2019. Credit quality also improved, and the credit risk profile of public funds assets strengthened with
- [First Quarter Investment Returns:  Cash Led the Way Again](https://pubfunds.org/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
- [Banking Crisis + 1 Year:  Should Federal Deposit Insurance Reform Be Part of the Response?](https://pubfunds.org/banking-crisis-1-year-should-federal-deposit-insurance-reform-be-part-of-the-response/) - A year ago, after the wreckage of the bank failures led by Silicon Valley Bank had been cleared, reforming deposit insurance was offered as a way to reduce the risk of future bank runs More recently, the effort has been sidelined by the battle over proposed rules to raise bank capital requirements and liquidity. Down
- [Fair Weather:  Public Funds Investors Are Well-Positioned to Meet Investment Expectations](https://pubfunds.org/fair-weather-public-funds-investors-are-well-positioned-to-meet-investment-expectations/) - The accompanying chart of recent moves in yields speaks volumes about the current market environment and its implications for public funds investors. Since the year began short-term money market rates have been at or near their generation highs. And they have barely noticed the big moves in market sentiment. LGIP rates, as measured by the
- [The Little Engine that Couldn’t:  The Demise of BSBY](https://pubfunds.org/the-little-engine-that-couldnt-the-demise-of-bsby/) - BSBY, the Bloomberg Short Term Bond Yield Index, which once was a contender to replace LIBOR, will cease to exist on November 15, 2024. If you’ve never heard of BSBY, or know of its existence only dimly, that is no surprise. It was once touted as a replacement for LIBOR (The London Interbank Offered Rate)
- [A Big Week for the Bond Market](https://pubfunds.org/a-big-week-for-the-bond-market/) - It is a big week for the bond market with a slew of economic releases (jobs, consumer confidence and a few inflation measures), the Federal Open Market Committee meeting (Tuesday/Wednesday) and investors desperately seeking direction. Public sector investors have a constrained universe: they do not generally invest in equities (though a few do), and their
- [What's With Bank Balances?](https://pubfunds.org/whats-with-bank-balances/) - I’ve been puzzling over a surprising set of statistics. The Federal Reserve reports that in recent years state and local government balances in checkable deposits and currency have mushroomed and are now nearly three times greater than they were in 2019. At the same time assets in time and savings accounts have declined. In pre-pandemic
- [What Treasury's Borrowing Plans Mean for State and Local Government Investors](https://pubfunds.org/what-treasurys-borrowing-plans-mean-for-state-and-local-government-investors/) - A shortage of short-term Treasuries? Perhaps not, but after a rapid expansion of issuance that dominated the market in the past two years, three developments could make it feel like there aren’t enough short-term Treasuries to go around. Why it matters. State and local governments rely on Treasuries as the foundation for their portfolios, with
- [Bank Regulation Meets Toxic Workplace Charges](https://pubfunds.org/bank-regulation-meets-toxic-workplace-charges/) - Last week two Congressional committees responsible for the nation’s financial services held six hours of oversight hearings with leaders of the Federal Deposit Insurance Corporation, the Federal Reserve, and the Office of the Comptroller of the Currency. In normal times these hearings would have focused on the significant and controversial Basel III Endgame rules proposed
- [Is Crypto in Our Future?](https://pubfunds.org/is-crypto-in-our-future/) - Crypto is slowly making its way into the consciousness of mainstream investors, including those who invest public funds. One indication is the passage last week by the House of Representatives of FIT21 (the Financial Innovation and Technology for the 21st Century Act), though it is unlikely to become law in this Congress. Another is a (reluctant?)
- [What’s Good Is Good](https://pubfunds.org/whats-good-is-good/) - Five months into the year, preferred investment strategies for public funds investors are performing quite well, thank you. Cash continues on top. Last year cash investments in LGIPs and money funds produced the highest returns in a generation and bested the returns of other segments of the fixed income markets. That record has extended in
- [When the Tail Wags the Dog:  A Word of Caution Related to Investing in CP and CDs](https://pubfunds.org/when-the-tail-wags-the-dog-a-word-of-caution-related-to-investing-in-cp-and-cds/) - Commercial paper and negotiable certificates of deposit make up a minor portion of the universe of short-term securities held by public agencies, money market funds and other institutional investors. But because the market for CP/CDs has suffered from disruption during periods of market stress, it has the continued focus of prudential regulators. This is highlighted
- [Uncertainty Ahead:  Growth of Public Sector Investment Portfolios Slows, Liquidity Expands](https://pubfunds.org/uncertainty-ahead-growth-of-public-sector-investment-portfolios-slows-liquidity-expands/) - • There are signs that the robust growth in state and local government investment portfolios in recent years is ending even as high interest rates generate strong internal portfolio growth. The recently-released Federal Reserve’s Financial Accounts report showed state and local government assets grew only 0.6% in the quarter ended March 31, 2024 and 4.3%
- [Cash and Short-Term Portfolios Had Strong Returns in the First Half of the Year](https://pubfunds.org/cash-and-short-term-portfolios-had-strong-returns-in-the-first-half-of-the-year/) - The PFII Investment Dashboard has been updated through quarter-end and reflects a couple of interesting market dynamics. Waiting for the Fed. LGIP yields have been locked around the Federal Funds rate. They are within a few basis points of their levels at the start of the year and likely will not move until the Fed
- [Is Texas a Model of a Public Funds Investor-Friendly Market?](https://pubfunds.org/is-texas-a-model-of-a-public-funds-investor-friendly-market/) - Texas could be the model for an investor-friendly public funds investment market, with a robust state-sponsored local government investment pool and a number of sizable alternatives that provide public funds investors competitive choices, low fees, risk guardrails and significant disclosure requirements. The strength of the industry traces back to a “near-death” run on the state’s
- [What the Big Bond Market Rally Means for Public Funds Investors](https://pubfunds.org/what-the-big-bond-market-rally-means-for-public-funds-investors/) - Last week’s big decline in interest rates feels a lot more real than the similar move at the beginning of the year. If so, what does it mean for public funds investors? The rally in bond prices boosted the returns on our 1–3-year model portfolio ahead of cash returns for the first time in several
- [Slow Progress:  The Opportunity to Expand FDIC Insurance for Public Units](https://pubfunds.org/slow-progress-the-opportunity-to-expand-fdic-insurance-for-public-units/) - In the aftermath of last year’s bank crisis there were calls to reform federal deposit insurance to add stability to the banking system and diminish the risk of runs on smaller community banks. Deposit reform could also improve the banking environment for state and local governments if they organize around this issue and raise their
- [Why [Some] Investors Seem to Ignore The likelihood of Lower Rates Ahead](https://pubfunds.org/why-some-investors-seem-to-ignore-the-likelihood-of-lower-rates-ahead/) - The path ahead for interest rates seems clear: the Federal Reserve will soon begin to reduce its policy rate, bringing down short-term rates generally. This has been the outlook for a couple of months, with only the timing and magnitude of cuts in question. In theory—Investments 101 if you will—this should lead investment pool managers
- [How Far/How Fast:  The Path for Pool Yields is Lower](https://pubfunds.org/how-far-how-fast-the-path-for-pool-yields-is-lower/) - The Federal Reserve is on the cusp of cutting rates. That much is crystal clear. When it does—most likely starting at its meeting September 18-–the yields on LGIPs and money funds will decline as well. How far and how fast will they fall? Here is a perspective on that question: LGIP and money fund yields
- [Research Note: Why Some investors May Choose an LGIP in a Declining Interest Rate Market](https://pubfunds.org/research-note-why-some-investors-may-choose-an-lgip-in-a-declining-interest-rate-market/) - Cash has been king for the past three years as rising interest rates boosted LGIP and money fund returns and depressed returns on longer duration investments like short term Treasury notes. Now that the Federal Reserve has shifted its policy to reducing rates there is a view that keeping large cash balances in an LGIP
- [Changing Local Government Investment Pool Managers:  Replace the Manager or Create a New LGIP?](https://pubfunds.org/changing-local-govt-investment-pool-managers-replace-the-manager-or-create-a-new-lgip/) - This LGIP Just Changed Managers. LGIPs rarely change managers. Sure, when a manager is sold this is viewed as a change under Federal law and triggers client approval, but the sale is usually described as “new owner, same dedicated employees.” Advisory agreements are normally renewed when they expire, perhaps with the board undertaking some diligence
- [PFII Files Comments with FDIC Urging Reform of Insurance for Public Agencies](https://pubfunds.org/pfii-files-comments-with-fdic-urging-reform-of-insurance-for-public-agencies/) - Earlier this week we filed formal comments with the Federal Deposit Insurance Corporation advocating for reform of the bank insurance program to raise limits on insurance and reduce the need for collateral to secure public deposits. The filing, in response to an FDIC Request for Information, is accessible here. Raising the limit for public units
- [Hole in the Bucket? State and Local Government Portfolio Growth Slows and May be Pressured by Rate Declines](https://pubfunds.org/swimming-upstream-state-and-local-government-portfolio-growth-slows-despite-decades-high-investment-rates/) - If you are managing (or overseeing) public funds these days, you might feel as if you are tending a bucket with a hole in it. With interest rates at their highest level in decades earnings are flowing into portfolios at a strong rate. But Federal Reserve data show asset growth recently has slowed. The reason?
- [The Next Chapter:  Three Post-Election Policy Moves that Should Command Your Attention](https://pubfunds.org/the-next-chapter-three-post-election-policy-moves-that-should-command-your-attention/) - With the election over, here is a quick flyover of three policy moves that could alter the playing field for state and local government investors: Crypto will gain prominence. Financial market regulations will be newly limited. Federal financing agencies could be re-structured and privatized. Crypto. Years of hype. rocketing (and volatile) returns on some crypto
- [Uncertain Times: Liquidity May Be More Valuable Now than Ever](https://pubfunds.org/uncertain-times-liquidity-may-be-more-valuable-now-than-ever/) - Investment managers often talk about the cost of excess liquidity. But liquidity may also have value. The value can be realized as ready cash to make up for unplanned shortfalls in revenue or acceleration in spending , or to take advantage of a rise in interest rates that increases earnings potential from re-investments. Liquidity management
- [Research Note: Commercial Paper Market Should be More Resilient After Money Fund Reforms](https://pubfunds.org/research-note-commercial-paper-market-should-be-more-resilient-after-money-fund-reforms/) - Commercial paper is a core holding of many state and local government investment portfolios. It provides a yield boost to separately managed portfolios and prime-based local government investment pools. The commercial paper market is a bit finicky: If you are a buyer there is little flex: you generally receive the rate posted by issuers. If
- [Waiting for the Fed](https://pubfunds.org/waiting-for-the-fed/) - Next week’s meeting of the Federal Open Market Committee will set the tone for the markets for the next several months. In one sense it may be a non-event: investors have coalesced around the view that the central bank will cut the main policy rate by 25 basis points to 4.25-4.50%. This would push government-oriented
- [A Good Year for Public Funds Investors](https://pubfunds.org/a-good-year-for-public-funds-investors/) - It’s been a good year for public funds investors. Cash and short fixed income strategies produced their highest returns in years. With a week to go returns for the year of around 5% for the PFII LGIP indices and in the range of 4.0% for limited duration separate account portfolios (current yields are about 4.25%)
- [Welcome to 2025, the Year of Heightened Uncertainty](https://pubfunds.org/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. New policies or not. The policies proposed by incoming President Trump are breath-taking in their scope. Any one of mass deportations, widespread
- [An Update on Bank Regulations: The Dead Parrot Sketch*](https://pubfunds.org/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
- [Beyond the News: Strong Growth in Public Funds Assets, But What's Next?](https://pubfunds.org/beyond-the-news-strong-growth-in-public-fund-assets-but-whats-next/) - State and local government investment assets grew by nearly 14% in the 12 months ended September 30, 2024, according to recently released Federal Reserve data. The growth rate is far higher than the overall pace of economic growth or the rate of growth in tax revenue in this period and seems to be a result
- [Beyond the News: So, What is Next?](https://pubfunds.org/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
- [Treasuries: Ya Gotta Love Em](https://pubfunds.org/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
- [Federal Agencies:  Oh, for The Good Old Days](https://pubfunds.org/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

## Pages

- [Homepage](https://pubfunds.org/) - Whatever it Takes. The Warsh FOMCKevin Warsh’s news conference at the conclusion of the Federal Open Market Committee meeting on...Keep ReadingVisit the Dashboard >Perhaps it’s an old story today but investors have fully washed Fed easing from their thinking and have begun to incorporate the possibility of tightening late this year or early in 2027.
- [Dashboard](https://pubfunds.org/dashboard/) - Investment DashboardYield and portfolio information to help public funds investment officials manage portfolios, monitor markets and benchmark portfolio performance of local government investment pools (LGIPs) and short term portfolios. Money Market Yields Date PFII Govt LGIP Net Yield PFII Prime LGIP Net Yield PFII Govt MMF Net Yield PFII Prime MMF Net Yield 3 Month
- [About](https://pubfunds.org/about/) - About Public Funds Investment InstituteWe are a nonprofit organization dedicated to empowering participants in the $4 trillion public funds investment market with insights, tools and resources to help them make well-informed investment decisions. Our MissionOur mission is to provide timely data and news, cutting-edge research, and best-practices advocacy to promote the common interests of public
- [About Our Dashboard & Sources](https://pubfunds.org/dashboard-sources/) - About Our Dashboard & Sources The PFII dashboard provides investment information, including yield and portfolio characteristics, to help public funds investment officials manage portfolios, monitor markets, follow industry trends, and benchmark portfolio performance. The charts and grid display yield and portfolio characteristics of local government investment pools (LGIPs), money market funds, collateralized deposits, and a
- [Terms of Use](https://pubfunds.org/terms/) - User AgreementWelcome to the Public Funds Investment Institute website (pubfunds.org). The Public Funds Investment Institute website (the “Website”) is an online information service provided by Public Funds Investment Institute (the “Institute”), a Pennsylvania-based nonprofit corporation. By accessing and using the Website, you agree to comply with and be bound by the terms, conditions, and disclaimers
- [Sitemap](https://pubfunds.org/sitemap/) - Site Map PagesHomepageDashboardAboutInsightsContactTerms of UsePrivacy PolicySitemapAbout Our Dashboard & SourcesTestingThank YouCategories Webinars Research and Analysis Beyond the News Stay informed and ahead of market changes.Subscribe to receive our no-cost research. “Beyond the News” is our weekly publication and “The Spotlight” is our in-depth analysis. NameThis field is for validation purposes and should be left unchanged.First
- [Privacy Policy](https://pubfunds.org/privacy-policy/) - Privacy Policy Your privacy is very important to us. Accordingly, we have developed this statement in order for you to understand how we collect, use, communicate and disclose and make use of personal information. The following outlines our privacy statement. Before or at the time of collecting personal information, we will identify the purposes for
- [Insights](https://pubfunds.org/insights/)
- [Contact](https://pubfunds.org/contact/)

## Categories

- [Beyond the News](https://pubfunds.org/category/news/)
- [Webinars](https://pubfunds.org/category/webinars/)
- [Research and Analysis](https://pubfunds.org/category/research-and-analysis/)

## Tags

- [Analysis](https://pubfunds.org/tag/analysis/)
- [Covid-19](https://pubfunds.org/tag/covid-19/)
- [Financial assets](https://pubfunds.org/tag/financial-assets/)
- [Investments](https://pubfunds.org/tag/investments/)
- [Liquidity](https://pubfunds.org/tag/liquidity/)
- [Portfolio composition](https://pubfunds.org/tag/portfolio-composition/)
- [Public funds](https://pubfunds.org/tag/public-funds/)
- [Public sector](https://pubfunds.org/tag/public-sector/)
- [Research](https://pubfunds.org/tag/research/)
- [Trends](https://pubfunds.org/tag/trends/)
- [Bank Failures](https://pubfunds.org/tag/bank-failures/)
- [Banking Regulations](https://pubfunds.org/tag/banking-regulations/)
- [Crypto Markets](https://pubfunds.org/tag/crypto-markets/)
- [Federal Reserve](https://pubfunds.org/tag/federal-reserve/)
- [Financing](https://pubfunds.org/tag/financing/)
- [Interconnectedness](https://pubfunds.org/tag/interconnectedness/)
- [Money Market Fund Reform](https://pubfunds.org/tag/money-market-fund-reform/)
- [Oversight](https://pubfunds.org/tag/oversight/)
- [Regulation](https://pubfunds.org/tag/regulation/)
- [Regulatory Reports](https://pubfunds.org/tag/regulatory-reports/)
- [FedNow](https://pubfunds.org/tag/fednow/)
- [; US debt sovereign ratings](https://pubfunds.org/tag/us-debt-sovereign-ratings/)
- [government shutdown](https://pubfunds.org/tag/government-shutdown/)
- [LGIPs](https://pubfunds.org/tag/lgips/)
- [Local government Investment Pools](https://pubfunds.org/tag/local-government-investment-pools/)
- [Money fund reform](https://pubfunds.org/tag/money-fund-reform/)
- [Bank credit ratings](https://pubfunds.org/tag/bank-credit-ratings/)
- [CalTRUST](https://pubfunds.org/tag/caltrust/)
- [Federal Home Loan Banks.](https://pubfunds.org/tag/federal-home-loan-banks/)
- [Federal government shutdown; Moody's; public funds investments](https://pubfunds.org/tag/federal-government-shutdown-moodys-public-funds-investments/)
- [LGIP Investment Trends](https://pubfunds.org/tag/lgip-investment-trends/)
- [Board](https://pubfunds.org/tag/board/)
- [Cybersecurity](https://pubfunds.org/tag/cybersecurity/)
- [Management](https://pubfunds.org/tag/management/)
- [Bank capital requirements](https://pubfunds.org/tag/bank-capital-requirements/)
- [Moody's](https://pubfunds.org/tag/moodys/)
- [Basel III Endgame](https://pubfunds.org/tag/basel-iii-endgame/)
- [Basel III End Game](https://pubfunds.org/tag/basel-iii-end-game/)
- [T+1 Trade Settlement](https://pubfunds.org/tag/t1-trade-settlement/)
- [FDIC Insurance Reform](https://pubfunds.org/tag/fdic-insurance-reform/)
- [Insuring public funds deposits](https://pubfunds.org/tag/insuring-public-funds-deposits/)
- [Public funds investments](https://pubfunds.org/tag/public-funds-investments/)
- [Financial Stability Board](https://pubfunds.org/tag/financial-stability-board/)
- [Texas LGIs](https://pubfunds.org/tag/texas-lgis/)
- [Texaspublicfundsinvestments](https://pubfunds.org/tag/texaspublicfundsinvestments/)
- [Money funds](https://pubfunds.org/tag/money-funds/)
- [Bank regulations](https://pubfunds.org/tag/bank-regulations/)
- [#LGIPs #publicfundsinvestmenrts #localgovernmentinvestmentpools](https://pubfunds.org/tag/lgips-publicfundsinvestmenrts-localgovernmentinvestmentpools/)
- [#financialmarkets](https://pubfunds.org/tag/financialmarkets/)
- [publicfundsinvestments](https://pubfunds.org/tag/publicfundsinvestments/)
- [debtceiling](https://pubfunds.org/tag/debtceiling/)
- [Moody'screditrating](https://pubfunds.org/tag/moodyscreditrating/)
- [#bankcapitalrule](https://pubfunds.org/tag/bankcapitalrule/)
- [#stablecoins](https://pubfunds.org/tag/stablecoins/)
- [Treasury issuance](https://pubfunds.org/tag/treasury-issuance/)
- [#Federal Agencies](https://pubfunds.org/tag/federal-agencies/)
- [#Fannie Mae](https://pubfunds.org/tag/fannie-mae/)
- [#Freddie Mac](https://pubfunds.org/tag/freddie-mac/)
- [#federalreserve](https://pubfunds.org/tag/federalreserve/)
- [#localgovernmentinvestmentpools](https://pubfunds.org/tag/localgovernmentinvestmentpools/)
- [#localgovernmentinvestment pools](https://pubfunds.org/tag/localgovernmentinvestment-pools/)
- [#LGIPs #publicfundsinvestments #localgovernmentinvestmentpools](https://pubfunds.org/tag/lgips-publicfundsinvestments-localgovernmentinvestmentpools/)
- [#NAST](https://pubfunds.org/tag/nast/)
- [#nationalassociationofstatetreasurers](https://pubfunds.org/tag/nationalassociationofstatetreasurers/)
- [#LGIPs #Localgovernmentinvestmentpools #publicfundsinvestments #financialmarkets #Federalreserve](https://pubfunds.org/tag/lgips-localgovernmentinvestmentpools-publicfundsinvestments-financialmarkets-federalreserve/)
- [#LGIPs #localgovernmentinvestmentpools #publicfundsinvestments #financialmarkets #bankCDs](https://pubfunds.org/tag/lgips-localgovernmentinvestmentpools-publicfundsinvestments-financialmarkets-bankcds/)
- [#localgovernmentinvestmentpools #creditmarkets #financialmarkets](https://pubfunds.org/tag/localgovernmentinvestmentpools-creditmarkets-financialmarkets/)
- [#LGIPs #localgovernmentinvestmentpools #Federalreserve #monetarypolicy #publicfundsinvestments](https://pubfunds.org/tag/lgips-localgovernmentinvestmentpools-federalreserve-monetarypolicy-publicfundsinvestments/)
- [#FDIC Insurance #publicfunds #publicunitdepositinsurance #mainstreetdepositorprotectionact](https://pubfunds.org/tag/fdic-insurance-publicfunds-publicunitdepositinsurance-mainstreetdepositorprotectionact/)
- [#bankcapitalrequirements](https://pubfunds.org/tag/bankcapitalrequirements/)
- [#fanniemae](https://pubfunds.org/tag/fanniemae/)
- [#freddiemac](https://pubfunds.org/tag/freddiemac/)
- [#SellAmerica](https://pubfunds.org/tag/sellamerica/)
- [#localgovernmentionvestmentpools](https://pubfunds.org/tag/localgovernmentionvestmentpools/)
- [#fixedincomeportfolioreturns](https://pubfunds.org/tag/fixedincomeportfolioreturns/)
- [#bankdepositinsurance](https://pubfunds.org/tag/bankdepositinsurance/)
- [#Iranandinterestrates](https://pubfunds.org/tag/iranandinterestrates/)
- [#interestrates](https://pubfunds.org/tag/interestrates/)
- [#stateandlocalgovernmentbudgets; #LGIPs#stateandlocalgovernmentinvestmentassets](https://pubfunds.org/tag/stateandlocalgovernmentbudgets-lgipsstateandlocalgovernmentinvestmentassets/)
- [#Treasuries](https://pubfunds.org/tag/treasuries/)
- [#treasuryyields](https://pubfunds.org/tag/treasuryyields/)
- [#predictionmarkets](https://pubfunds.org/tag/predictionmarkets/)
- [#corporatecreditspreads](https://pubfunds.org/tag/corporatecreditspreads/)
- [#federalreseve](https://pubfunds.org/tag/federalreseve/)
- [#publicfundsinvestmentss](https://pubfunds.org/tag/publicfundsinvestmentss/)
- [#moneymarkets](https://pubfunds.org/tag/moneymarkets/)
- [#bankcdsforgovernments](https://pubfunds.org/tag/bankcdsforgovernments/)
- [#LGIPs #localgovernmentinvestmentpools #monetarypolicy #publicfundsinvestments](https://pubfunds.org/tag/lgips-localgovernmentinvestmentpools-monetarypolicy-publicfundsinvestments/)