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ECONOMIC GOMMENTARY
City of Palm Desert
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The Federal Open Market Committee (FOMC} will meet next on October 29-30.
The majority of FOMC members believe that the Fed will begin sca�ing down its
bond-buying program this year. The Fed's failure to do so last month was a
"relatively close call." The federal government shutdown, however, may cause
a delay in scaling down if the Fed believes that the shutdown has added to
economic weakness.
Janet Yellen, a retired Berkeley economics professor and the Fed's Vice Chair,
has been �ominated to replace Ben Bernanke as Chair of the Federal Reserve.
If approved, Yelien's four-year term will begin on January 1, 2014. Professor
Yellen is a Keynesian who has an expansive view of the Fed's role in the economy.
She is a key architect of the Fed's "easy money" policies, which have had a
modest effect on economic growth and employment. Yellen believes that the
Fed should have acted more aggressively in printing money.
Based on past history, the federal government shutdown should by resolved by
October 17. Both parties are "grandstanding" for the 2014 mid-term elections.
Roughly 500,000 nonessential federal workers have been furloughed. The overall
effect on fourth-quarter economic growth should be minimal since delayed
spending will be made up later in the quarter. Financial markets have reacted to
the shutdown by dumping billions of dollars of U.S. Government debt. Some
financial institutions have refused to accept U.S. short-term debt.
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City Treasurer
` Certified California Municipal Treasurer
Thousands of Dollars
Month-End Book Value
Month-End Market Value
Paper Gain (Loss)
Prior Year Book Variance
Interest Earnings
Yield-To-Maturity
Weighted Maturity (Days)
Effective Duration
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Capitai Markets Team
City Treasurer
Paul S. Gibson, C.C.M.T.
Deputy City Treasurer
Thomas W. Jeffrey, J.D., M.B.A.
Investment O
The treasurer shall invest all
public monies in a manner
that ensures safety of
principal; sufficient liquidity
to finance the City's
expenditures; and the
highest yield possible after
the previous two objectives
have been met.
PORTFOLIO STATISTICS
$ 204,899 $ 220,313 $ 220,370 $ 218,688 $ 209,809 $ 199,761
$ 204,899 $ 220,319 $ 220,373 $ 218,697 $ 209,821 $ 199,776
$ - $ 6 $ 3 $ 9 $ 12 $ 15
$ 5,3�iy $ 13,559 $ 14,565 $ 1,885 $ (8,277) $ (10,437)
$ 51 $ 59 $ 59 $ 57 $ 53 $ 53
0.30% 0.31 % 0.32% 0.32% 0.32% 0.33%
1 12 26 26 29 29
0.00 0.00 0.00 0.01 0.01 0.01
All data as of September 30, 2013