Title
Receive and accept the Treasurer’s Report of Investments for the quarter ending December 31, 2024.
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, 2024.
SUMMARY:
Government Code Section 53646 (b) (1) states the Treasurer may submit a quarterly report of investments. The following discussion of economic and market conditions along with attached exhibits support investment activity during the October - December period.
DISCUSSION:
The U.S. economy is on track for a soft landing, with inflation and labor markets performing as expected, even though progress has been slower recently. Economic growth is still strong, mainly due to a resilient consumer, but changes in fiscal policy could affect future growth and inflation. The Federal Reserve continued to cut interest rates, lowering them by 50 basis points to 4.25% - 4.50% during the quarter. The Federal Reserve December forecast suggests 50 basis points of cuts in 2025, which is an overall more gradual pace of easing rates than previously projected as inflation continues to be a challenge.
On December 31, 2024, the County of Monterey investment portfolio contained an amortized book value of $3,251,449,949 spread among 289 separate securities and funds. The par value of those funds was $3,284,468,019 with a market value of $3,248,901,782 or 100% of amortized book value. The portfolio’s effective rate of return for the period was 4.30%. The portfolio generated an estimated quarterly earnings of $33,074,476, which will be distributed proportionally to all agencies participating in the investment pool. The investment portfolio had a weighted average maturity of 485 days. The County Treasury continues to achieve safety, liquidity, and yield goals by balancing shorter-term debt and longer-term debt given investment opportunities in the current market environment.
The investment portfolio follows al...
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