J A N U A R Y 2 0 , 2 0 2 6
City of Commerce
Investment Strategy Update
P R E S E N T E D B Y :
N I C K V A C C A R I , C T P – R E G I O N A L D I R E C T O R ,
A D V I S O R Y S E R V I C E S
Economic Update
2025 Year In Review
3 SOURCE: BLOOMBERG AS OF 1/9/26, MEEDER PUBLIC FUNDS
Federal Reserve Cuts Rates
Fed lowered the Fed Funds
rate three times in 2025
from 4.50% to 3.75%
Tariffs ,
Government Shutdown,
and Immigration
were major economic
stories of 2025
S&P 500 closes
near an all-time high,
up 16.4% for the year
AI stocks were Big Drivers
U.S. Economic Growth
Was better than
economists expected
U.S. Treasury yield curve
Re-inverts
In shorter maturity tenors
U.S.
Unemployment Rate
Climbs from 4.1%
(Dec 2024)
to 4.4%
(Dec 2025)
U.S. Federal debt tops
$38 Trillion
YOY CPI drops from
2.9% (Dec 2024) to
2.7% (Nov 2025)
Rates Dropped
The 3-mo Treasury Bill
Yielded 4.31% in Dec 2024
and ended the year at 3.63%
The 2-yr Treasury Note
Yielded 4.24% in Dec 2024
and ended the year at 3.47%
The 5-yr Treasury Note
Yielded 4.38% in Dec 2024
and ended the year at 3.73%
3.63%
3.57%
3.52%
3.38%
3.30%
3.20%
3.15%
3.10% 3.10% 3.10% 3.10% 3.11%
3.08% 3.09% 3.12% 3.13%
3.63%
2.75%
3.00%
3.25%
3.50%
3.75%
Jan 26 Mar 26 Apr 26 Jun 26 Jul 26 Sep 26 Oct 26 Dec 26 Jan 27 Mar 27 Apr 27 Jun 27 Jul 27 Sep 27 Oct 27 Dec 27 Upcoming Fed Meetings
2026-27 Fed Funds Rate Per Futures Market by Fed Meeting Months Fed Funds
4 SOURCE: BLOOMBERG AS OF 1/9/26
• The Federal Reserve lowered
the Fed Funds rate at the
December 10th meeting by .25%.
• They stated that a slower labor
market was the primary reason.
• The futures market is pricing in
the next .25% cut at the June
2026 meeting.
Current Effective Fed Funds Rate
Fed Funds Futures
5% 30% 49% 105% Chance of
Next Cut:
Inflation
5 SOURCE: BLOOMBERG AS OF 1/9/26
9.1 2.7
0 1
2 3
4 5
6 7
8 9
10 Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Jul-25
Aug-25
Sep-25
Oct-25
Nov-25
Dec-25
Percent
CPI YOY
5.6 2.8
0 1
2 3
4 5
6 Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Jul-25
Aug-25
Sep-25
Oct-25
Nov-25
Dec-25
Percent
PCE Core YOY
• Inflation declined considerably
from the pandemic highs of
2022 (CPI YoY 9.1%).
• However, inflation remains
above the Federal Reserve’s
target 2% (Personal
Consumption Expenditures Core
YoY rate – lower graph).
• Tariff inflation is still a concern,
but not as much as last year.
Fed’s Target Rate
5.7%
7.0%
3.3%
7.0%
-1.0%
0.6%
2.9% 2.8% 2.9%
2.5%
4.7%
3.4%
0.8%
3.6%
3.3%
1.9%
-0.6%
3.8%
4.3%
1.0%
2.1% 2.0% 2.0% 2.0%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
Q3 22
Q4 22
Q1 23
Q2 23
Q3 23
Q4 23
Q1 24
Q2 24
Q3 24
Q4 24
Q1 25
Q2 25
Q3 25
Q4 25
Q1 26
Q2 26
Q3 26
Q4 26
Real GDP QoQ
Growth
6 SOURCE: BLOOMBERG AS OF 1/9/26
• Economic growth as measured
by Gross Domestic Product
(GDP) showed a greater-thanexpected rate in the third
quarter of 2025, posting 4.3%
growth.
• With equity indexes, real estate,
and other assets at or near alltime highs, upper income households continue to provide
strength to the overall consumer
spending.
Bloomberg
Survey
Estimates
2 3
4 5
6 7
8 9
10 11
12 13
14 15
1948 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 2026 Percent
U.S. Unemployment Rate
Employment
7 SOURCE: BLOOMBERG AS OF 1/9/26
• Many economists consider the
range of full employment
between 4.5% and 5.5%.
• The unemployment rate has
climbed from the cycle low of
3.4% (Apr 2023) to 4.4% as of
December 2025.
• The Fed stated the slowing labor
market as the primary reason
they lowered the Fed Funds rate
the last part of 2025.
Full Employment Zone
11 39
29 54
30 35
50 0
10 20
30 40
50 60
1948 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 2026 Months
U.S. Unemployment Rate: Consecutive Months At or Below 4.5% Yields
8 SOURCE: BLOOMBERG AS OF 1/9/26
• Intermediate-term interest rates
peaked in October of 2023, with
the 2-year Treasury hitting a
cycle high of 5.22%.
• Even though interest rates have
declined with lower job growth,
they are still materially higher
than the average the past 20
years.
• The 2-year Treasury has
averaged 2% the past 20 years.
• With the Fed expected lower
short-term rates, Meeder
believes it’s still an opportune
time to lock in interest income
stability with purchases of
intermediate-term securities.
3.25%
3.50%
3.75%
4.00%
4.25%
4.50%
4.75%
5.00%
5.25%
5.50%
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Jul-25
Aug-25
Sep-25
Oct-25
Nov-25
Dec-25
Jan-26
Feb-26
Mar-26
Yields: U.S. 2 Yr T-Note vs. Fed Funds Mid-Rate
2Yr Fed Funds
Portfolio Review
Your Portfolio
Cash $79,091,241
Securities $60,249,016
Total Portfolio $139,340,256
Your Securities
Weighted Average Maturity 2.62 years
Weighted Average Yield 3.86%
Estimated Annual Income $2,325,612
Your Asset Allocation
Your Maturity Distribution
Current Portfolio
City of Commerce portfolio as of 12/31/2025
YIELD AND INTEREST INCOME INFORMATION IS ANNUALIZED. ALL YIELD INFORMATION IS SHOWN GROSS OF ANY ADVISORY AND CUSTODY FEES AND IS BASED ON YIELD TO MATURITY AT COST.
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.
32%
3%
10%
1%
12%
13%
29%
US Treasuries
US Government Agencies
Commercial Paper
Money Market Funds
MBS
ABS
Corporate Bonds
10 11,587,695
10,030,606
11,881,243
13,925,156
12,824,315
19% 17% 20% 23% 21%
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
0-1 year 1-2 years 2-3 years 3-4 years 4-5 years
Disclosures
11 Meeder Public Funds, Inc. is a registered investment adviser with the Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Registration with the SEC does not imply a certain level of skill or training. The opinions expressed in this presentation are those of Meeder Public Funds, Inc. The material presented has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed.
Past performance does not guarantee future results. Opinions and forecasts are all subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security. Investing in securities involves inherent risks, including the risk that you can lose the value of your investment. Any forecast, projection, or prediction of the market, the economy, economic trends, and fixed-income markets are based upon current opinion as of the date of issue and are also subject to change. Opinions and data presented are not necessarily indicative of future events or expected performance. Meeder Public Funds, Inc. cannot and does not claim to be able to accurately predict the future investment performance of any individual security or of any asset class. There is no assurance that the investment process will consistently lead to successful results. The investment return and principal value of an investment will fluctuate, thus an investor’s shares, or units, when redeemed, may be worth more or less than their original cost.
Meeder Public Funds
6125 Memorial Drive
Dublin, OH 43017
901 Mopac Expressway South,
Building 1, Suite 300
Austin, TX 78746
120 North Washington Square
Suite 300
Lansing, MI 48933
111 West Ocean Blvd, 4th Floor
Long Beach, CA 90802
222 Main Street, 5th Floor
Salt Lake City, UT 84101
10655 Park Run Drive, Suite 120
Las Vegas, NV 89144
250 Fillmore Street, Suite 150
Denver, CO 80206
meederpublicfunds.com
866.633.3371
MeederInvestment.com
FOR INFORMATIONAL PURPOSES ONLY. SEE IMPORTANT DISCLOSURES AT THE END OF THE PRESENTATION.
Disclosures