Title
Receive and accept the Treasurer’s Report of Investments for the quarter ending September 30, 2026.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Receive and accept the Treasurer’s Report of Investments for the quarter ending September 30, 2026.
SUMMARY:
Pursuant to Government Code Section 53646(b)(1), the Treasurer may submit a quarterly report of investment activities to the Board of Supervisors. The following discussion and attached exhibits summarize economic and market conditions and document investment activity for the period from July 1 through September 30, 2026.
DISCUSSION:
U.S. economic growth remains resilient, supported by consumer spending and continued investment in artificial intelligence (AI). While labor-market conditions remain generally balanced, hiring momentum has slowed. Core inflation remains elevated, with higher oil prices and rising input costs presenting continued upside risks. AI-related investment may support future productivity growth, although its longer-term effects on employment and inflation remain uncertain.
The Federal Reserve increased its policy rate by 25 basis points to 3.75%-4.00% during September. The September projections indicated that 16 of 18 Federal Open Market Committee participants anticipated at least one additional rate increase before year-end, reflecting continued concern about persistent inflation. Federal Reserve Chair Kevin Warsh emphasized the importance of restoring price stability, while the removal of forward guidance placed greater emphasis on incoming economic data in assessing the future path of monetary policy.
As of September 30, 2026, the County of Monterey’s investment portfolio had an amortized book value of $2,995,198,033 diversified across 244 individual securities and funds. The portfolio’s par value totaled $3,004,644,572 with a market value of $2,962,038,352 representing approximately 99% of amortized book value. The portfolio generated an effective rate of return of 4.12% for the quarter, producing estimated interest earnings of $32,010,058. Interest earnings received in cash will be distributed proportionally to all agencies participating in the County’s investment pool by the Auditor-Controller. The portfolio maintained a weighted average maturity of 485 days.
The County Treasury continued to manage the portfolio with an emphasis on safety, liquidity, and yield by maintaining a disciplined balance of shorter-term and longer-term investments while prudently responding to market opportunities consistent with the County's Investment Policy. All investments remained in compliance with applicable California Government Code and the County's adopted Investment Policy. Market valuations were obtained from independent third-party pricing sources, including Bloomberg LLP, U.S. Bank, and live-bid pricing for corporate securities.
OTHER AGENCY INVOLVEMENT/COMMITTEE ACTIONS:
A copy of this report will be distributed to all agencies participating in the County investment pool. Quarterly Treasury reports are also posted on the Treasurer-Tax Collector’s website. In addition, a monthly report of investment transactions is provided to the Board of Supervisors in accordance with Government Code Section 53607.
FINANCING:
The investment portfolio contains sufficient liquidity to meet all projected expenditures over the next six months. Investment earnings in the General Fund appear to be trending at a rate that will meet the FY 2026-27 budgeted total.
BOARD OF SUPERVISORS STRATEGIC PLAN GOALS:
Mark a check to the related Board of Supervisors Strategic Plan Goals:
____ Well-Being and Quality of Life
____ Sustainable Infrastructure for the Present and Future
____ Safe and Resilient Communities
____ Diverse and Thriving Economy
____ Dynamic Organization and Employer of Choice
If does not fall under any of the above Board of Supervisors Strategic Plan Goals (Other):
_X__ Administrative
This recommendation supports the Administrative initiative by promoting transparency, accountability, and prudent stewardship in the investment and safeguarding of public funds.
Link to the Strategic Plan:
<https://www.countyofmonterey.gov/home/showdocument?id=139569>
Prepared by:
Lupe Reyes, Chief Deputy Treasurer-Tax Collector, x5415
Approved by:
Jake Stroud, Treasurer-Tax Collector, x5015
Attachments:
Exhibit A - Investment Portfolio Review 09.30.26
Exhibit B - Portfolio Management Report 09.30.26
cc:
Auditor-Controller - Internal Audit Section
All depositors
County Administrative Office
County Counsel