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PFM tells Los Altos Hills finance committee portfolio weathered yield spike; staff urged to budget conservatively for FY27
Summary
At the May 4 FIC meeting, PFM adviser Justin reported that March yield increases caused paper losses but recent reinvestments and purchases lifted quarterly interest earnings; he recommended conservative FY27 interest-earnings assumptions while staff outlined a draft budget showing narrow near-term surpluses and long-term pressure.
Justin, a PFM representative, told the Finance & Investment Committee on May 4 that global events and the March rise in Treasury yields disrupted markets and produced paper losses in many fixed‑income portfolios but also presented reinvestment opportunities for the town.
"Beginning in March, there was a rise in yields of about 42 basis points that certainly caused some paper losses," Justin said, adding that PFM purchased about $2.8 million of new issuance for the town, including…
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