Title
Receive and accept the Treasurer’s Report of Investments for the quarter ending September 30, 2025.
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, 2025.
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 July - September period.
DISCUSSION:
The U.S. economy has remained resilient, but a cooling labor market is emerging as a potential risk. Job creation has nearly come to a halt as employers adopt a cautious “no hire, no fire” approach. While inflation has recently picked up, the Federal Reserve expects these upward price pressures to be temporary. Overall uncertainty has eased as markets have adjusted to recent tariff and fiscal policy announcements.
In September, the Federal Reserve implemented its first rate cut of 2025. Chair Powell acknowledged the ongoing challenge of balancing risks between inflation and employment but emphasized that the health of the labor market remains the Federal Reserve’s primary focus. The Federal Reserve’s September “dot plot” suggests an additional 50 basis points in cuts for 2025, though opinions among policymakers remain divided, with several members supporting no further reductions this year.
On September 30, 2025, the County of Monterey investment portfolio contained an amortized book value of $3,079,220,309 spread among 264 separate securities and funds. The par value of those funds was $3,096,305,181 with a market value of $3,096,629,606 or 100% of amortized book value. The portfolio’s effective rate of return for the period was 4.26% generating estimated quarterly interest earnings of $32,518,115. Earnings received in cash will be distributed proportionally to all agencies participating in the investment p...
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