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Page 3 of 4 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />• The Fed’s September “dot plot” implies 50 basis points of additional cuts in 2024 and 100 basis <br />points through 2025 <br />Treasury yields continued their descent <br />• Yields on maturities between 3 months and 10 years fell 62-112 basis points during the 3rd <br />quarter <br />• The yield curve began to disinvert in the 3rd quarter as the spread between the 2-year and 10- <br />year Treasury reached positive territory for the first time in over 2 years <br />• Despite intra-quarter spread widening, yield spreads across most credit sectors were range bound <br />at tight levels, reflecting the strength of the economy <br />The overall message from the September 30th investment report is that the Federal Reserve began the <br />cutting cycle with 50 basis points, labor markets moved into better balance, inflation trends lowered, <br />consumer activity remains solid, and markets priced lower in anticipation of fed cuts. <br />PFMAM will continue to be selective when evaluating new issues in all sectors. PFMAM has provided an <br />in-depth market update in the attached investment report. <br />FISCAL IMPACT <br />The City’s portfolio with PFMAM received $2,067,788 in net interest earnings over the reporting period, <br />up from $1,902,604 for the quarter ended June 30, 2024. All interest earnings are allocated monthly <br />through a preset methodology that spreads earnings to the appropriate funds. Due to accounting systems <br />conversations, fees for PFMAM’s services during this quarterly period are currently unavailable; fees for <br />PFMAM’s services last quarter were $35,169.26 and are paid out of total interest earnings. There is no <br />additional budget appropriation required. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA <br />Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />PUBLIC NOTICE <br />Public notification was achieved by posting the agenda, with the agenda items being listed, at least 72 <br />hours prior to the meeting. <br />6.A. - Page 3 of 65 <br />12