Title
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending December 31, 2016.
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, 2016.
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, a listing of historical Monterey County Treasury Pool yields versus benchmarks, and the investment portfolio by maturity range.
DISCUSSION:
During the October - December quarter, U.S. Treasury yields surged over the previous quarter as well as Treasury yields as of a year ago. The labor market has continued to strengthen and economic activity has been expanding at a moderate pace since mid-year. Job gains have been solid in recent months and the unemployment rate has declined. Inflation has increased somewhat since earlier this year but is still below the Federal Reserve's longer run objective of 2 percent. In view of the realized and expected labor market conditions and inflation, on December 14, 2016 the Federal Reserve's Federal Open Market Committee decided to raise the target range for the federal funds rate to 0.50% - 0.75%. This action continues to support further strengthening in labor market conditions and a return to a 2 percent inflation rate.
On December 31, 2016, the Monterey County investment portfolio contained an amortized book value of $1,381,798,947spread among 89 separate securities and funds. The par value of those funds was $1,382,296,942, with a market value of $1,384,251,719 or 100.18% of amortized book value. The portfolio's net earned income yield for the period was 1.07%. The portfolio produced an estimated quarterly income ...
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