Finance director: yields fall and data disruptions complicate Bedford’s investment outlook

Finance Director Brady Olson presented Bedford’s fourth-quarter investment report to the City Council on Oct. 28, citing declining yields, a plan to manage cash flows into the audit period, and uncertainty in federal economic reporting.

Olson reported that the city’s yield dropped from around 4.6% last quarter to approximately 4.23% and that if the city were to invest now it would be getting “about a 3 and a half” percent return on short-term instruments. He said the city received the bulk of its property-tax revenue early in the fiscal year and is drawing down cash to pay operating expenses. "We're gonna fall short of the $6,000,000 number," Olson said, referring to an internal projection, and added the year-end audit will finalize figures.

Olson told council members the Federal Reserve outlook appears to show some rate cuts priced in and that a federal reporting shutdown has reduced data that typically informs Fed decisions. He said the city’s investment committee reviewed the materials and recommended the report go to council, and staff will continue investing in measured increments to balance liquidity and returns.

Council asked clarifying questions about what the Fed is seeing; Olson attributed the expectation of future rate cuts to a softer job market. No formal council action was taken on the report; council later approved a separate resolution adopting the city’s investment policy as part of the consent agenda.