Title
Receive and accept the Treasurer's Report of Investments for the quarter ending December 31, 2023.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Receive and accept the Treasurer's Report of Investments for the quarter ending December 31, 2023.
SUMMARY:
Government Code Section 53646 (b) (1) states the Treasurer may submit a quarterly report of investments. The attached exhibits provide a narrative portfolio review of economic and market conditions that support the investment activity during the October - December period, the investment portfolio position by investment type, and the investment portfolio by maturity range.
DISCUSSION:
Inflation continued to move lower throughout the quarter as the November Consumer Price Index (CPI) reading fell to 3.1% year-over-year. Lower energy and goods prices helped offset increases in wage-driven services costs. The labor market also continued to come into better balance. The unemployment rate ended 2023 at 3.7% and 494,000 jobs were added during the quarter. Gross Domestic Product (GDP) for the quarter ended September 30, 2023, the latest available data, showed the U.S. economy grew 4.9%, on an annualized basis, which was the strongest reading over the past seven quarters.
The Federal Reserve updated the Summary of Economic Projections (SEP) released following its December meeting, which showed a peak overnight rate of 5.25% to 5.50% and implied an end to the current interest rate increase cycle. The SEP also showed 75 basis points of decreases by December of 2024. Market expectations for the overnight rate have reached their lowest levels in six months in response to falling inflation, the Federal Reserve pivot from interest rate increases to decreases, and the moderating labor market.
On December 31, 2023, the County of Monterey investment portfolio contained an amortized book value of $3,233,798,020 spread among 323 separate securities and funds. The par value of those funds was $3,27...
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