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Reinvest Market Update November 2024

Updated: May 15

 
The Fed decreased interest rates by 25 basis points at this month’s FOMC meeting. Despite this reduction to short-term rates, longer term treasury rates have risen ~17 basis points since November 4th – in large part due to market reactions to the results of the 2024 Presidential Election. President-Elect Trump’s campaign proposals have caused expectations for future economic growth in the US and created concerns about increased inflation in the coming years. This has resulted in a selloff of US treasuries.
 
The treasury yield curve, as a result, is starting to steepen and is now nearly flat between the 1- and 5-year point (see dashed-line below). Tax-exempt to taxable ratios remain low, however, and there continues to be an opportunity for tax-exempt borrowers to lock in positive arbitrage earnings on their tax-exempt bond proceeds. Further, the reductions in the Fed Funds target rate will continue to have the most impact on daily, weekly, and other very short-term interest rates, reducing the benefit of variable rate alternative investment products such as money market funds. 
US Treasury Yield Curve Comparison

We continue to encourage borrowers and issuers coming to market with tax-exempt new money issuances or with unspent tax-exempt bond proceeds to take advantage of higher short-term treasury rates and consider their options for locking in a fixed-rate product for their reinvestment.  

 
Below we show current reinvestment rate indications. For a more tailored indication to your specific fund(s) or to discuss the risks and benefits associated with these structures, please reach out to Georgina Walleshauser or your Blue Rose advisor.  
Average Life
GIC
Repo
Portfolio
1-year
4.35%
4.05%
4.30%
2-year
4.25%
3.91%
4.24%
3-year
4.28%
4.25%

Georgina Walleshauser, Vice President | 952-746-6036  

 

In her role of Vice President, Georgina Walleshauser manages a number of the firm’s clients, providing them with advice on and ensuring a smooth closing for all types of debt and derivative product transactions, capital planning solutions, and detailed credit assessments. Ms. Walleshauser serves as an advisor to public and private higher education, non-profit and governmental institutions. She specializes in analyzing and assessing reinvestment strategies for clients, leading most of Blue Rose’s reinvestment transactions. Ms. Walleshauser has vast expertise in providing modeling, analytics, market data, and research in support of the delivery of capital planning, debt and derivatives advisory, and reinvestment services to our clients. She joined Blue Rose in 2017 as a Junior Quantitative Analyst.

 

Media Contact:  

 

Laura Klingelhutz, Marketing Coordinator

952-208-5710

 
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Blue Rose Capital Advisors is an independent financial advisory firm that does not engage in underwriting activities. We are registered with the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB) as a Municipal Advisor. Because we have not engaged in underwriting activities in our history, we generally qualify as an Independent Registered Municipal Advisor (IRMA).

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