Finance Highlights 2008 1118 - Laserfiche WebLink

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September 2008 MARKET REVIEW MARKET SUMMARY Treasury bond yields were much lower in September as market participants sought safety due to market volatility. Economic data were weaker, as the economy lost jobs for the ninth straight month and the September Non-Farm Payroll number showed a decrease of 159,000 jobs. Housing and retail sales reports also showed much slower growth. Since recent economic releases do not yet reflect the impact of September's financial market turmoil, it is possible that growth could slow even further in the months ahead. On September 7 the government placed Fannie Mae and Freddie Mac under federal conservatorship. The agencies are now being managed by theirfederal regulator and the Treasury has promised to provide very significant financial support for the agencies if they need it. During the month of September, AIG, Lehman Brothers, Merrill Lynch, Washington Mutual, and Wachovia were also either rescued by the government or agreed to be purchased bystronger partners. The FOMC held the federal funds rate at 2.00% attheir meeting an September 16th. The next scheduled FOMC meeting is on October 29th. Going forward, market participants will continue to look for signs of an economic slowdown or an end to market volatility as well as anticipating the direction and timing ofthe next Federal Reserve move. 3 Month 0.9Z 1.72 (0.80) 2 Year 1.98 2.35 (0.37) 5 Year 2.98 3.09 (0.11) 10 Year 3.83 3.82 0.01 30 Year 4.31 4.42 (0.11) {.. g v . ~~'i`': ~ .~ , Syr - 2yr T-Note 1.00 0.74 0.26 10yr - 2yr T-Note 1.85 1.47 0.38 Source: Bloomberg Treasury yields were sharply lower in September as market participants sought safety in Treasuries due to global market volatility. The yield curve became steeper as short- term rates declined more than longer-term rates.