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| Source: https://regents.universityofcalifornia.edu/regmeet/may22/i1attach2.pdf |
When the Regents meet next week, the Investments Committee will be first up at bat. And the current outlook won't be great, as the chart above from that committee shows. Returns to the pension fund for the first nine months of the fiscal year have been negative. The only ostensibly positive returns come from items such as private equity whose returns are difficult to measure. Since the end of the nine-month period, the stock market has generally moved down. Rising interest rates generally lower the value of both stocks and bonds. Stocks fall because the risk of a hard landing (recession) goes up due in part to Federal Reserve policy to raise rates to fight against inflation. Existing bonds drop in value so that their yields will be competitive with new bonds that pay higher rates.
We'll see later today - when the governor releases his May Revise budget - whether UC will have something to cheer about from the state. The governor's budgetary news conference starts at 10 AM today and can be seen at his Twitter account: https://twitter.com/CAgovernor and his Facebook account: https://www.facebook.com/CAgovernor. We will provide analysis of the May Revise in due course. The actual budget will appear at https://www.ebudget.ca.gov/ around the time of the news conference.
Be warned: The governor is not noted for brevity and tends to talk about everything and anything. Here is a two-minute summary of his January budget news conference:
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