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For the Quarter Ended March 31, 2022 <br />Market Update <br />For the Quarter Ended December 31, 2024 <br />Market Update <br />Current Market Themes <br />▸U.S. economic soft landing remains on track▹Inflation and labor markets are in line with Fed expectations despite slower recent <br />progress▹Strong economic growth prospects remain intact, aided by a resilient consumer▹Changes to fiscal policy may impact growth and inflation trajectory <br />▸Fed easing cycle moves forward as expected, but looks to slow in 2025▹The Fed cut the federal funds target rate by an additional 50 basis points (bps) during the <br />fourth quarter to 4.25% - 4.50%▹The Fed’s December “dot plot” implies another 50 bps of cuts in 2025, less than the 100 <br />bps of cuts previously projected in September▹Fed Chair Powell noted the slower pace of cuts reflect “stickier” inflation heading into 2025 <br />▸Treasury yields responded to expected monetary and fiscal policy▹Yields on maturities between 2 years and 10 years rose 60-83 bps during the 4th quarter▹The yield curve disinversion continued and was flatter at the front end and positively <br />sloped beyond 1-year▹Yield spreads remained near historically tight levels across most sectors aided by robust <br />demand and strength in the economy <br />Source: Details on market themes and economic indicators provided throughout the body of the presentation. Bloomberg Finance L.P., as of December 31, 2024. <br />PFM Asset Management | pfmam.com <br />CITY OF REDWOOD CITY <br />11 <br />6.A. - Page 17 of 60 <br />22