Title
Receive and accept the Treasurer’s Report of Investments for the quarter ending December 31, 2012.
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, 2012.
SUMMARY:
Government Code Section 53646 (b)(1) states the Treasurer may submit a quarterly report of investments. The attached Exhibit A provides a narrative portfolio review of economic and market conditions that support the investment activity during the September - December period. Exhibit B describes the investment portfolio position by investment type as of December 31, 2012. Exhibit C is a listing of historical Monterey County Treasury Pool yields versus benchmarks. Exhibit D describes the investment portfolio by maturity range, and Exhibit E is an overview of the short term funds that the Treasurer invests in overnight, liquid assets.
DISCUSSION:
During the October to December quarter the Treasury bond curve changed very little in the 0 - 5 year term. Yields in maturities of a year or less were down slightly, while longer maturities were slightly higher. The Federal Reserve continued their Quantitative Easing program, and for the first time announced targets for unemployment and inflation that would influence their decision to raise interest rates. The Fed continued their assurances that they will keep the Fed Funds Rate at or below 0.25 percent but added that it would stay at that level until unemployment falls below 6.5% and inflation tops 2.5%. Congress continued to be unable to pass a bill to avoid the fiscal cliff until New Years day when they passed a bill that included increased revenues, but no cuts to spending. All of these factors helped contribute to many institution’s continued investment in fixed income securities.
On December 31, 2012 the Monterey County investment portfolio contained an amortized cost basis of $1,033,515,337 spread among 78 separate securities and...
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