Weekly Market Update

FOMC MEETING UPDATES

Thursday, September 21, 2017

The Federal Reserve is leaving short-term interest rates unchanged and announced a timeline for reducing its $4.5 trillion balance sheet. The Federal Open Market Committee said Wednesday that it will keep the federal funds rate between 1.0--1.25%. While acknowledging damage inflicted by recent hurricanes, most Fed policymakers stuck with forecasts for another rate increase in 2017--most likely in December--as well as three increases in 2018. Fed Chair Janet Yellen said in a press conference after the end of the meeting that the fall in inflation this year remained a mystery, adding that the central bank is prepared to update the interest rate outlook if needed. U.S. bond yields rose, pushing up the U.S. dollar after the Fed's decision, but U.S. benchmark stock indexes were little changed.

In Other News

  • University of Virginia sold a $300 million century bond (100-year maturity) today, with a yield of 4.179%. With a spread to the 30-Year U.S. Treasury of 1.375%, the issue had one of the lowest yields and lowest spreads of any higher education century bond issued to date.
  • Describing the results as "disappointing," Harvard University reported on Tuesday that its $37.1 billion endowment earned an 8.1% return for its most recent fiscal year. The endowment's new chief executive, N. P. Narvekar, said that the fund was in the middle of a major revamping and that problems would "require time to overcome."
  • Purdue University says the U.S. Department of Education has signed off on its plan to buy Kaplan University, a for-profit online school. Purdue previously received state approval for the deal, and its regional accreditor, Higher Learning Commission has yet to approve.
  • Trump finds himself in a position to leave a lasting mark on the world's most powerful central bank. Fed governors serve 14-year terms and Trump has come into office when several are leaving or their terms are expiring. In addition to deciding whether to renominate Yellen, Trump will be able to nominate four of the seven other members of the Board of Governors.
  • Sophia Wisniewska, the regional chancellor of the University of South Florida St. Petersburg, was abruptly forced out Monday after claiming to have remained on campus before Hurricane Irma to check on students; it was later determined that she had fled the state.
  • An advocacy organization that gave more than $15 million to a Massachusetts ballot campaign to lift the cap on charter schools has agreed to pay $426,500 to settle allegations of campaign finance violations.

Rating Agency Update

  • Moody's affirmed Clarkson College's Aa3 rating. The outlook is stable.
  • S&P assigned A- to Butler University's Series 2017C&D Educational Facilities Revenue Bonds. The outlook is stable.
  • S&P assigned A+ to University of Rhode Island's Series 2017A&B Auxiliary Enterprise Revenue Bonds and Series 2017C&D Educational and General Revenue Bonds. The outlook is stable.
  • S&P affirmed Northern Michigan University's A rating. The outlook is revised to stable from negative.
  • S&P affirmed Villanova University's A+ rating. The outlook is revised to positive from stable.
  • S&P affirmed Saginaw Valley State University's A rating. The outlook is stable.
  • S&P affirmed Iona College's BBB rating. The outlook is stable.
  • S&P affirmed Utah Valley University's A rating. The outlook is stable.
  • S&P affirmed Lewis & Clark College's A- rating. The outlook is stable.
  • S&P affirmed St. John Fisher College's A+ rating. The outlook is stable.
  • S&P affirmed Hope College's A rating. The outlook is stable.