Title
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending December 31, 2017.
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, 2017.
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, the short-term treasury yields continued to slowly move upward in response to the Federal Reserve's (Fed's) efforts to normalize policy by raising interest rates. The core personal consumption expenditures (PCE) price index, the Fed's preferred measure of inflation, remained at 1.4% year-over-year in November. The Fed forecasts inflation to gradually rise in 2018 further towards their 2% run target, and reaching the 2% target in the beginning of 2019. In addition, U.S. Recession Indicators show that recession risks appear low in the near term. Labor markets continued strong into the year-end as the unemployment rate remained at 4.1%, the lowest level in more than 16 years.
On December 31, 2017, the Monterey County investment portfolio contained an amortized book value of $1,556,463,937.33 spread among 117 separate securities and funds. The par value of those funds was $1,558,052,557.25 with a market value of $1,551,822,253.16 or 99.7% of amortized book value. The portfolio's net earned income yield for the period was 1.27%. The portfolio produced an estimated quarterly income of $ 4,456,424.41 that will be distributed proportionally to all agencies participating in the investment ...
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