Leesburg OPEB trustees hear PFM review of Q2 markets; managers trimmed equity, moved to core bonds

The Town of Leesburg OPEB Trust Finance Board on Aug. 27 received a second-quarter market and portfolio review from PFM Asset Management, which described large quarter-to-quarter swings in equities, lingering inflationary pressure and a cautious tactical shift that briefly reduced equity exposure in favor of core fixed income.

PFM representative Scott Fleming opened the presentation by saying, "So as we look at the financial markets for the second close the second quarter, 2 themes come to my mind, which is volatility and resilience." Fleming and other PFM staff summarized drivers including proposed tariffs, shifting import volumes, shelter costs and signs of slowing in the labor market.

PFM representative Jack Shorbis and PFM representative Hossein Korbeli discussed inflation and jobs, noting core personal consumption expenditures remained above the Federal Reserve's 2% target and shelter costs were a persistent contributor to higher inflation. Korbeli said wage and hiring trends showed signs of softening in July after revisions to earlier months' job…