Advisers tell Salt Lake County: municipals up, short-term rates likely to stay high

An adviser presented the county’s municipal market outlook and economic snapshot, telling the Debt Review Committee that municipals have broadly risen in the last month while U.S. Treasury yields show mixed movement: “a little bit of movement on the front end of US treasuries, going down a little bit and long long US treasuries going up” (Presenter, speaker 1).

The adviser said Utah’s economy is stronger than the national average on several measures, including lower unemployment and stronger employment growth, and added that these favorable conditions mean “we don't really expect interest rates to decline in the near term.” Jonathan, participating remotely, summarized market probabilities for upcoming Federal Reserve meetings and said futures show about a 64% chance the September rate stays the same and a material chance of a 25-basis-point increase by December.

Why it matters: higher short-term rates affect the county’s planned large issuance later this year; the committee heard that locking flexibility into bond documents (direct purchase versus public sale and callable features) can be used to manage proceeds and refinancing risk if rates change.

What they said: Presenter (speaker 1) framed the short-term window as the “next six months.” Jonathan (speaker 7) said market-implied probabilities point toward higher short-term rates in the coming months.