Lake County reports $183 million in cash, 3.57% portfolio yield; staff flag Fed policy as key risk

Lake County commissioners heard an investment portfolio update at their July 2025 meeting, during which staff reported $183,000,000 in cash and $259,000,000 in securities at quarter end and said the portfolio—s weighted-average yield is 3.57% with a weighted-average maturity of 1.72 years.

The presenter said Federal Reserve policy remains the principal driver of interest-rate risk for the county. Citing the Fed—s June projections and recent public remarks by Fed officials, staff said markets expect two 25-basis-point rate cuts in 2025 — one at the September or October meeting and another in December — which would move the federal funds rate toward roughly 4.0% from its current 4.25%–4.5% range.

Staff discussed several macroeconomic indicators that inform portfolio decisions: inflation that has been modest on a quarterly basis but near 2.7% annualized, a headline 2025 GDP figure that showed a negative 0.5% reading (which staff said was distorted by firms building inventory ahead of potential tariffs), initial unemployment claims around 224,000, a 4.1% unemployment rate and rising continuing claims. The presenter also noted consumer-credit delinquency rates have risen from about 8% two years ago to roughly 15% today.

On market opportunities, staff pointed to two- and five-year Treasury yields that they said are at levels comparable to the pre-2008 period and said five-year yields in particular present attractive reinvestment options. Staff noted several Treasury holdings purchased about four to five years ago are maturing; reinvesting those proceeds could increase returns from under 1% at purchase to market rates currently above 4%.

Staff said the county has shifted some holdings into cash after the treasurer secured above-market offers from local banks on certificates of deposit and savings accounts. The presenter said commercial paper and corporate bonds have also been used to take advantage of short-term rates, and that the portfolio remains diversified and managed in accordance with the county—s investment policy.

The presenter thanked Eileen Stanek and other staff for their work on the portfolio. The commission did not take a formal vote on investment policy or reallocation during the meeting; the session included only the update and questions. Earlier in the meeting the commission unanimously approved minutes from its April 17, 2025 meeting and then adjourned following the investment update.