News - August 1, 2023 - by Ray Hagar
The state of Nevada is doing very well with its financial investments, Nevada Treasurer Zach Conine said recently on Nevada Newsmkers.
So well that Conine described the state's investment office as "crushing it," using a baseball analogy to drive home his point:
"From the state perspective, which is a little different than the economic perspective, we are actually hitting to cover of of the ball," Conine told host Sam Shad.
"More than 80 percent of the new revenue that was found in the final Economic Forum before the budget closed (at the Nevada Legislature), came from additional treasury investment returns that we think we going to now exceed that."
The Nevada Economic Forum approved a projected budget of $11.6 billion for fiscal years 2024 and 2025 in May, according to the Las Vegas-Review Journal. It was more than $200 million increase from what the group predicted in December.
Conine suggests that those numbers could improve before the next Economic Forum meeting in December.
"This past year was probably -- and we will confirm this in the next couple of days -- one of the best investment-return years in the history of the state," he said. "We are absolutely crushing it in our investment office."
The hikes in interest rates this year by the Federal Reserve impacted those returns, said Conine, who defeated Republican Michele Fiore by about one percentage point to win his second term in November of 2022.
"A lot of that has to do to the fact that the Fed has raised rates," he said. "We have been prepared for that raising and on the short side of the curve, the kind of limited maturities, of a six-months-or-less period, is paying quite a bit. And so we are able to make sure that we have the liquidity and the risk protection that the state needs while the other side is just making money hand over fist."
As far the the short-term future of the economy, Conine said, "It does look, economically, that we are coming in for more of a soft landing."
"Obviously, recession fears continue to be out there and there are a lot of families that are hurting, right?" he said. "Gas is a little less at the pump from the last time we talked but they (families) are hurting at the grocery store. They are hurting if they are fighting an eviction, given all that is happening on that front."
Pandemic safe guards for renters in Nevada expired in June, causing a 170 percent increase eviction filings, according to a report from Princeton University and reported on by the Nevada Independent.
Nearly, 5,000 evictions filings were made in June, according to the Princeton report.
"And so, the work of the state continues as we try to make sure we have protections in place and that the safety net that we all pay for actually works when people fall into it," Conine said.
Mortgages rates may continue to climb, which is not good news for protential home buyers, Conine said. The 30-year fixed rate nationally for housing mortgages in currently at an average of 6.68 percent, according to statistics from NerdWallet.
"We expect that there will be some level of increased rates before the end of the year," Conine said. "The market is certainly (nearing) that and then a couple of smaller declines next year."
While inflation had dropped in some sectors, Conine sees issues with the price of groceries.
"It (pricing) will rise very quickly and it will fall a little more slowly," he said. "I expect we will see prices decline but over a longer period of time."
Conine said his office will have a record-setting government bond issuance later this year. Some of the money from that bonding will be used to improve state-government infrastructure in Southern Nevada.
"We are going to market later this year with a bond issuance, the largest bond issuance in the history of the state," he said.
"It will be around a half a billion dollars and that bond issuance will support a number of new state buildings, the ability for us to get all state employees in Southern Nevada in the same area and create some legislative buildings in the same area in Southern Nevada, which we have needed for quite some time."