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Horizon representative briefs trustees on economy, short-term yields and CD rates
Summary
A representative from Horizon reviewed recent national indicators (a reported 4.2% quarterly GDP figure), upcoming CPI data, and recommended considering 2'3- and 4'5-year CDs at roughly 3.85% and 3.95% for clients who can lock funds longer. Trustees asked clarifying questions about CPI and credit spreads.
A Horizon representative (identified in the meeting as Lon) gave the Michigan City Board of Cemetery Trustees an economic update at the Feb. 12 meeting, focusing on macro indicators and implications for the board's invested funds.
Lon cited a quarterly GDP estimate near 4.2% and said forecasts for 2026 ranged between about 2% and 2.5%. He noted the last reported CPI was 2.7% with a core CPI of 2.6% and that the Bureau of Labor Statistics release (delayed due to a government shutdown) was expected the following day. Lon said the Federal Reserve was widely expected to cut rates one to two times during the year depending on economic conditions.
He discussed account yields and short-term investments the board uses, telling trustees that 2- and 3-year certificates of deposit were yielding roughly 3.85% and that 4- and 5-year CDs were roughly 3.95%, rates he characterized as 25 to 35 basis points above current money-market yields. Trustees asked what "CPI" and "credit spread" mean; Lon said CPI is the consumer price index, a government measure of inflation, and described credit spreads as the premium investors demand to hold corporate bonds over risk-free securities when perceived credit risk increases.
The trustees accepted the bank and investment updates and used the discussion to confirm that Horizon Trust fees discussed elsewhere were standard for the asset size being managed.
