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At the end of thesecondquarter, the City’s portfolio consisted of 67% of the portfolio maturing overnight, <br />2% maturing in 1 year, 18% maturing in 1-2 yearsand 13% maturing beyond two years. <br />By Investment Maturity <br />13% <br />18% <br />2% <br />67% <br />Overnight1-12 Months <br />12-24 Months24-36 Months <br />Currently, the 3-month T-Bill is at0.30%; 2-year, at0.88%; 5-year, at1.38%; and, the 20-year is at2.28% <br />(seeyield curve below).Rates along the short end are the same as they were 3 months ago, and there have <br />beenno changes to the overnight rate. <br />Yield Curve <br />3.00% <br />2.00% <br />1.00% <br />0.00% <br />Treasury Bills <br />3 months agocurrent <br />On December 16, 2015the fed increased the target rate from 0.00% to 0.25%to a target rate of 0.25% to <br />0.50% marking the first rate increase in seven years.As expected, the Federal Open Market Committee <br />decided not to raise rates at the March meeting stating that “global economic and financial developments <br />continue to pose risks.” Although the U.S. economy has been steady to slightly positive, the expectation <br />of a rate increase this year has be revised down to 55% for December. While staff continues to monitor <br />rates and economic conditions,the strategy for the portfolio will,as always,focus on ladderingto pick up <br />yield along the curve and maintaininga constant cash flow and liquid position. <br />2 <br /> <br />