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City of Palm Deser� ��>�,«a��
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ECONOMIC COMMENTARY
The federal Reserve Open Market Committee (FOMC) met on January 2930,
and reaffirmed that it would continue with quantitative easing in order to keep
long-term interest retes low, and to encourage more spending, investment, and
hiring. This came amid news that Ihe U.S. economy had stalled in 4Q2012. The
Fed attributed this to "weather-related disruptions and other transitory factors".
The FOMC repeated that it would keep buying bonds ($85 billion per month) until
unemployment numbers improve. It also reaffrmed its commitment to keep
short-term interest rates near zero until unemployment falls from 7.8 percent
to 6.5 percent, with inAation remaining in an acceptable range of 2.0 - 2.5 percent.
The U.S. Treasury's debt credit rating will be up for review this year. In August
2071, Standard & Poor's lowered it from "AAA" to "AA+°, I( is believed that there
is a 50/50 chance that either Moody's Investors Service or Fitch Ratings or both
will also downgrade ihe Treasury's credit rating. Aside from a short-term hit to
financial markets, no widespread abandonment of Treasuries by investors is
likely, however, because there is no market deep enough or safe enough to
replace them. There may be some long-term erosion of of the dollar's status
as a reserve currency.
In January, the City received approximately $6.8 million in property taxes. The
RDA Successor Agency received approximately $18.5 million in property laxes.
✓�llll�.S. �O/l� L�L�✓i'%✓� �K
City Treasurer
Certified California Municipal Treasurer
h-End Book Value $
h-End Market Value $
rGain(Loss) $
Year Book Variance $
:st Earnings $
-To-Maturity
hted Maturity (Days)
tive Duration
198,185 $
198,223 $
38 $
(32,215) $
55 $
0.35%
29
0.03
192,086 $
192,120 $
34 $
(14,228) $
54 $
0.34°/
31
0.03
194,781 $
194,809 $
28 $
1,165 $
58 $
0.37%
29
0.03
City Treasu�er
PaW S. Gibson, C.C.M.T.
Deputy City Treasurer
Thomas W. Jeffrey, J.D., M.B.A.
The [reasurer shall invest all
public monies in a manner
that ensures safery of
principal; suficient liquidiry
to finance the City's
expenditures; and the
highest yield possible after
the previous two objectives
have been met.
206,754
206,794
40
99
71
All data as of January 31, 2012
195,056 $
195,071 $
15 $
(828) $
64 $
0.39%
30
0.04
19Q990 $
i99,032 $
42 $
(6,063) $
64 $
0.39 %
29
0.04
28
0.04