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 […]
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: […]
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
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
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 […]
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 […]