TRANSMITTAL LETTER FOR BOARD MEETING OF NOVEMBER 5, 2020
COMMITTEE ON FINANCE
Mr. Brian A. Perkovich, Executive Director
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Report on the investment interest income during August 2020
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Dear Sir:
Attached is a report of cash investment interest income received by the District for the month of August 2020 and a comparison of income for the same period in 2019.
The District’s inventory of investments at August 31, 2020, consisted of 209 items having a total par value of $808,397,357.86, an average annual yield of 0.532%, and total interest income to maturity of approximately $6.9 million. Inventory figures at the same date in 2019 were of 267 items having a total par value of $877,537,659.26, an average annual yield of 2.185%, and total interest income to maturity of approximately $9.4 million.
Interest Forecast for 2020:
On March 23, 2020, the Federal Reserve decided to decrease the target range for the federal funds rate to 0.00% to 0.25%. This decision was based upon the increased risk to economic activity posed by the Corona Virus. The Fed stated that after their March 3, 2020 decrease to the federal funds rate to 1.00% to 1.25%, they needed to take further action. The Fed decreased the rate on March 23, 2020 to support the flow of credit to households and businesses by addressing strains in the markets for Treasury securities and mortgaged-backed securities. The Federal Reserve does not take this decrease lightly, as these rates have not been seen since the 2008 financial crisis. However, it is necessary to continue to promote and maintain a healthy economy during this time.
Respectfully Submitted, Mary Ann Boyle, Treasurer, MAB
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