Weekly Market Update

FED MINUTES SIGNAL RATE INCREASE IN JUNE

Thursday, May 24, 2018

At their meeting earlier this month, Federal Reserve officials signaled their intention to raise the benchmark short-term interest rate in June. If the economy performs as expected, "it would likely soon be appropriate for the committee to take another step" in raising rates, according to minutes of the Federal Open Market Committee, which were released Wednesday. Only a few Fed officials thought inflation might move above the 2% target, while others stressed that a move above 2% "could be helpful in anchoring longer-run inflation expectations at a level consistent with that objective."

Officials disagreed on whether the flattening of the yield curve was a reliable recession signal: several said it would be important to monitor the slope of the curve, while others thought that the yield curve may have become less reliable at signaling future economic activity.

In Other News

  • MissionU, a start up in postsecondary education that attracted $11.5 million in venture capital funding, is closing down after a year. MissionU aimed to give 18- to 22-year-olds a yearlong educational program focused on building career skills. A source familiar with MissionU speculated that applications for the second cohort of students were down significantly compared to the first.
  • Western Governors University announced on Wednesday that Allison Barber will leave her post as chancellor of WGU Indiana to start an affiliated fundraising venture. The newly created WGU Advancement said it will raise funds to "build financial support for initiatives that support the university's commitment to reinvigorating the promise of higher education for all."
  • Over 50 million households don't earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation, and a cell phone, according to a study released last week by the United Way ALICE Project.
  • Cambridge University's governing council is considering divesting its fossil fuel related investments. Several institutions, including Oxford and Stanford, have already divested some or all of such investments.
  • Microsoft is partnering with Case Western Reserve University to bring together its HoloLens augmented reality device and quantum technology to build a new form of MRI which will provide more comprehensive diagnostic information than traditional MRI systems.

Rating Agency Update

  • Moody's assigned Aa2 to University of Iowa Hospitals & Clinics' Series S.U.I 2018 Hospital Revenue Bonds. The outlook is stable.
  • Moody's upgraded Northeastern University's rating from A2 to A1 and assigned A1 to the University's Series 2018A Revenue Bonds and Series 2018B Taxable Bonds. The outlook is revised to stable from positive at the new level.
  • Moody's assigned A1 to Gordon State College's Series 2018 Refunding Revenue Bonds. The outlook is stable.
  • Moody's assigned A1 to Georgia Southwestern State University's Series 2018A Refunding Revenue Bonds and Series 2018B Taxable Refunding Revenue Bonds. The outlook is stable.
  • S&P assigned AAA to Yale University's Series 2018A Revenue Bonds. The outlook is stable.
  • S&P assigned AA to Southern Arkansas University Board of Trustee's Series 2018 Revenue Bonds. The outlook is stable.
  • S&P affirmed the University of Wyoming Trustees' Series 2018 Tax-Exempt Facilities Improvement Revenue and Revenue Refunding Bonds. The outlook is stable.
  • S&P assigned AA to Utah State University's Series 2018B Research Revenue Bonds. The outlook is stable.
  • S&P assessed A.T. Still University of Health Sciences rating as A-. The outlook is stable.
  • S&P affirmed the University of Mississippi Educational Building Corp's AA rating. The outlook is stable.
  • S&P affirmed Niagara University's BBB+ rating. The outlook is stable.
  • S&P affirmed Amherst College's AA+ rating. The outlook is stable.