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
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
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 […]
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 […]
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%. […]
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
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
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
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 […]
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 […]