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PFM Asset Management LLCFor the Quarter Ended December 31, 2021MarketUpdate MarketThemesFor the Quarter Ended December 31, 2021MarketUpdate© PFM Asset Management LLC |pfmam.com• COVID-19 caseloads reach record highs as the Omicron variant emerges as thedominant strain• The U.S. economy is characterized by:• Rapidly increasing inflation• Improved labor market conditions• Depressed consumer confidence• The Federal Reserve is reducing monetary policy accommodation• Accelerated pace of asset purchase tapering• Fed expects three rate hikes in 2022• Changing composition of FOMC leadership• The U.S. Treasury yield curve experiences “bear-flattening”• Short-term yields shift higher amid rate hike expectations• Longer-term yields adjust to evolving inflation and economic growth uncertaintiesFor the Quarter Ended December 31, 2021Market Update© PFM Asset Management LLC pfmam.com|REDWOOD CITY126.A. - Page 18 of 4722