Laserfiche WebLink
Factors to Consider for 6 -12 Months <br />PFM Asset Management LLC <br />© PFM Asset Management LLC | pfmam.com <br />For the Quarter Ended March 31, 2022 <br />California Affiliated Risk Management Authorities Market Update <br />CITY OF REDWOOD CITY <br />For the Quarter Ended September 30, 2024 <br />Market Update <br />Current outlook Outlook one quarter ago Negative Slightly <br />Negative <br />Neutral Slightly <br />Positive <br />Positive <br />Statements and opinions expressed about the next 6-12 months were developed based on our independent research with information obtained from Bloomberg and FactSet. The views expressed within <br />this material constitute the perspective and judgment of PFM Asset Management LLC at the time of distribution (6/30/2024) and are subject to change.Information is obtained from sources generally <br />believed to be reliable and available to the public; however, PFM Asset Management LLC cannot guarantee its accuracy, complet eness, or suitability. <br />Monetary Policy (Global): <br />•The Fed has begun its easing cycle with a 50 basis <br />point (bp) cut. The FOMC’s September median “dot <br />plot” projection suggests an additional 50 bps in rate <br />cuts by the end of the year “if the economy performs <br />as expected”. The projections also calls for an <br />additional full percentage point of cuts in 2025. <br />•The global easing cycle is underway with nearly all <br />major central banks (excluding the Bank of Japan) <br />completing multiple rate cuts. <br />Economic Growth (Global): <br />•U.S. economic growth remains strong reflecting a <br />consumer who continues to spend at elevated <br />levels. <br />•Economic growth outside the U.S. remains mixed. <br />•China has moved forward with a package of <br />stimulus measures aimed to boost growth. The <br />country remains poised to take additional swift <br />action should it be deemed necessary. <br />Inflation (U.S.): <br />•Inflation continues its trend lower but has been <br />buoyed by stubborn housing costs. <br />•The broad-based inflation cooling helped fuel the <br />Fed’s decision to cut by 50 bps but policy makers <br />note they are not declaring victory on price stability. <br />Financial Conditions (U.S.): <br />•The continuation of stable market measures, such <br />as narrow corporate yield spreads, record equity <br />index levels and low volatility, reflect economic <br />confidence. <br />•We remain focused on the cooling labor market and <br />effects this might have on the consumer as potential <br />catalysts for a broader slow down, but that is not our <br />base case expectation. <br />Consumer Spending (U.S.): <br />•The consumer continues to spend and support <br />economic strength. Upward revisions to the <br />personal savings rate paint the consumer in better <br />light than previously thought but the trend of <br />consumers dipping into savings continues. <br />•Moderation in the pace of overall spending is <br />expected given slowing wage growth and cooling <br />labor market conditions. <br />Labor Markets: <br />•The labor market continues to moderate from <br />extremely strong levels seen in prior quarters. The <br />recent downward revisions to nonfarm payrolls <br />through March 2024 further emphasized the <br />cooling. <br />•Other labor metrics remain well positioned such as <br />the layoffs and discharge rate pointing towards <br />moderation rather than deterioration. <br />6.A. - Page 32 of 65 <br />41