07-05-2017 Council Packet - Laserfiche WebLink

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City of Lino Lakes – Investment Report Market Commentary June 22, 2017 Economy Activity and Labor Market •Job gains have moderated but remain solid throughout this year and the unemployment rate has declined. •Household spending has picked up in recent months and business fixed investment has continued to expand. •The labor market has continued to strengthen and economic activity has been rising moderately so far this year. The Committee continues to expect that economic activity will expand at a moderate pace and labor market conditions will strengthen further. •In the near-term, risks to the economic outlook appear balanced, but the Committee is monitoring inflation closely. Inflation •Inflation is expected to remain somewhat below 2% in the near-term but stabilize around the Committee's 2% objective over the medium-term. •Market-based measures of inflation compensation remain low, and survey-based measures of longer-term inflation expectations are little changed. Dual Mandate •The Committee decided to raise the target range for the federal funds rate to 1.00 to 1.25%. •Monetary policy remains accommodative, supporting some further strengthening in labor market conditions and a sustained return to 2% inflation. •The Committee will continue to reinvest principal payments from its holdings of agency debt, agency MBS and Treasury securities. •The Committee currently expects to begin implementing a balance sheet normalization program this year. Next FOMC decision: July 26, 2017 Date 6/19/2017 MTY Yield MTY Yield MTY Yield MTY Yield MTY Yield 1m 0.83%3m 1.05%1Y 1.30%1Y 1.32%30-Day 1.15% 3m 1.00%6m 1.13%2Y 1.45%2Y 1.48%60-Day 1.17% 6m 1.11%1Y 1.26%5Y 2.10%5Y 2.16%90-Day 1.25% 1Y 1.19%2Y 1.40%10Y 2.48%10Y 2.86% 2Y 1.32%5Y 1.86% 5Y 1.74%10Y 2.57% 10Y 2.15% Date 6/19/2017 MTY Yield MTY/Ca11 Yield MTY Yield MTY Yield MTY Yield 3m 1.10%1Y/3M 1.20%1Y 1.55%1Y 1.65%30-Day 1.43% 6m 1.20%1.5Y/3M 1.31%2Y 1.70%2Y 1.81%60-Day 1.45% 1Y 1.40%2Y/6M 1.42%5Y 2.27%5Y 2.66%90-Day 1.55% 2Y 1.60%3Y/6M 1.62%10Y 2.92%10Y 3.30% 5Y 2.20%5Y/6M 1.91% Source: Wells Fargo Securities and Bloomberg Brokered CDs Agy Callable (1x)Corporate Bonds (A-rated) Txbl Municipals (A-rated) CP (A2/P2) Corporate Bonds (AA-rated) Txbl Municipals (AAA-rated) CP (A1/P1) Current Market Yields U.S. Treasuries Agy Bullet