Title
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending December 31, 2022.
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, 2022.
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:
The U.S. economy during this period was characterized by strong labor market conditions as well as growth in consumer spending and business investments, which were primary contributing factors to mitigate the impacts of a possible recession. Inflation remained elevated during the quarter; however, Consumer Price Index (CPI) has moderated for five consecutive months from the June peak of 9.1% to the November reading of 7.1%. Interest rates on securities with maturities under 2-years saw the biggest increases during the quarter, while 3-to 5-year maturities fell slightly, and longer-maturities rose modestly. The yield curve remained near historically negative levels of inversion at year end.
On December 14, 2022, the Federal Open Market Committee (FOMC) voted to raise the Federal Funds target rate by 50 basis points (0.50%) to a new range of 4.25% to 4.50%, which was a modest down shift following four consecutive 75 basis point (0.75%) increases. Rapid decreases in personal consumption may have caused the Federal Reserve to ratchet back its tightening plans.
On December 31, 2022, the Monterey County investment portfolio contained an amortized book value of $2,927,536,012 spread among 297 separate securities and funds. The par value of those funds was $2,951,545,544 with a market value of $2,847,146,41...
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