Title
Receive and accept the Treasurer’s Report of Investments for the quarter ending December 31, 2025.
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, 2025.
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 October 1 through December 31, 2025.
DISCUSSION:
The U.S. economy continues to demonstrate overall resilience, supported by solid consumer and business spending and more stable trade conditions. However, the recent government shutdown has complicated economic analysis by limiting the availability of certain key data. Inflation measures may be understated due to data collection disruptions and technical adjustments, while labor market indicators suggest modest softening, with the unemployment rate trending upward and net job growth near zero.
In response to evolving economic conditions, the Federal Reserve reduced the federal funds target rate by 50 basis points during the fourth quarter, establishing a target range of 3.50% to 3.75%. Federal Reserve Chair Jerome Powell acknowledged the continued challenge of balancing the dual mandate of price stability and maximum employment. The December “dot plot” indicates potential additional 25 basis point rate reductions in both 2026 and 2027, though the wide dispersion of projections reflects heightened uncertainty regarding the future policy path. Financial markets currently anticipate further monetary easing, particularly in the event of a more dovish Federal Reserve Chair assuming office in mid-2026.
As of December 31, 2025, the County of Monterey’s investment portfolio had an amortized book value of $3,478,120,933, invested across 26...
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