Cornerstone warns of an unusually uncertain market; district cautioned to avoid higher-risk commercial paper

Kevin Carpenthes, the Cornerstone adviser presenting to the Council Rock School District finance committee, told members the current investment climate is unusually uncertain and urged caution in seeking higher yields. "In my 25, 26 years doing this, I've never seen the market be as uncertain in direction," Carpenthes said, noting short‑term yields in the roughly 3.7–3.8% range and a yield curve that has been ‘‘pretty flat.’’

Carpenthes said that while commercial paper is a legal investment, it is riskier than treasuries and offers marginal extra yield given current Fed funds and money‑market conditions. "It doesn't make any sense to us to take extra risk for that extra return," he said, recommending the district continue prioritizing safety and liquidity. He summarized the district's position as meeting the three priorities for public‑sector cash management: safety, liquidity and yield.

Tony Rack, director of business administration, said the district remains "on target for budget, but it will be close," echoing Cornerstone's caution that market returns may not materially ease near term. Committee members asked about inflation, the new Fed leadership and how a change in oil prices could affect rates; Carpenthes said a sustained spike in oil would make Fed rate cuts less likely and could push yields higher. The presentation concluded with Carpenthes offering to answer follow‑up questions and noting administrators had tools in place to keep reserves liquid and secure.

The presentation was informational; no formal investment policy vote was taken. The committee will use the report to inform short‑term cash placement and budget sensitivity planning.