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 […]
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 […]
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 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.
Beyond the News: Issue #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%.
Public Sector Financial Assets Continue to Grow, Even as the Economy Slows
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.