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Yield Curve <br />3.00% <br />2.00% <br />1.00% <br />0.00% <br />Treasury Bills <br />3 months agocurrent <br />The most current overnight rate was set on December 16, 2008 at 0.00% to 0.25%. As mentioned in the <br />last report, timing of an increase in the fed funds rate will be highly dependent on economic data. Last <br />quarter the consensus was that an increase would not happen until after April, possibly June/July. <br />Economic data has been weaker than expected, which is pushing the projected date of an increase until <br />September or even later. The economic environment is much stronger than it was when rates were <br />initially decrease; however, inflation remains lower than 2%. We will continue to focus on laddering the <br />portfolio to maintain a constant cash flow and a liquid position. <br />2 Year T-Note <br />8.00% <br />6.00% <br />4.00% <br />2.00% <br />0.00% <br />In summary, we will continue to invest the City’s funds in conservative investments, as authorized by the <br />Public Funds Investment Act, always keeping in mind Safety first, and then Liquidity and lastly Yield. <br />3 <br /> <br />