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<br /> --------- --------- ----- <br /> . . <br /> I <br /> -. <br /> The report shall contain a discnssion of the outlook for interest rates and the . <br /> economic trend for the ullcoming year investment strate\:ies to be imDlemented and <br /> budgetary expectations for investment income. <br /> The general outlook for interest rates in 1996 is for them to decrease_ Most economists . <br /> believe the economy was losing momentum as 1996 began and growth may be sluggish <br /> enough to generate recession concerns and pull long-term interest rates down_ With annual . <br /> inflation remaining low (3 _0% or less from 1992-1995) and recession concerns present, the <br /> Federal Reserve may continue on its course of additional rate cuts in 1996. By year.end <br /> 1996, we may be seeing the yield curve move down slightly across all maturities. The . <br /> estimated annualized rate ofreturn for 1996 should be in the range of 5.0% to 5.5%. <br /> 1996 interest was budgeted at $335,250 on an expected average portfolio balance of . <br /> $6,700,000 with an expected yield of 5.0%. <br /> Attached Schedules I <br /> Attached are related schedules for your further review: .. <br /> 1. Investment portfolio analysis as of 12131/95. <br /> 2. 1995 annualized Investment Portfolio return. I <br /> 0 FRI and zero maturities by year 1996-2000. <br /> J. <br /> 4_ Inception.to-date acti vity of the Piper mutual fund investment. <br /> This report will be discussed with the Finance Committee at their March, 1996 meeting. I . <br /> herel'\ith submit this annual report to the City Council pursuant to the annual reporting <br /> requirement of the Investment Policy. . <br /> ~,p ~, ;Jp <br /> Terrance R. Post I <br /> City Treasurer <br /> March 15, 1996 I <br /> Enclosures . <br /> I <br /> 4 -. <br /> . <br />