We have been discussing higher education as well as health care for quite a while. The Trump administration said it will transfer some of the Education Department’s most extensive grant programs and major portions of several offices to other federal agencies, part of a broader plan to reduce the department’s authority significantly. This plan will shift tens of billions of dollars in FED Funding away from the education department and give the Department of Labor, in particular, greater oversight of the Federal Education budget. We have been cautious about this debt and have been following it closely to see how it will impact credits. If you are buying this structure, we would encourage you to speak to us about the pros/cons.
FED Reserve Bank of Richmond President Tom Barkin offered an optimistic inflation outlook, while suggesting the labor market may be weaker than the original data suggested. We have seen this before from other FED presidents, and I suspect we will continue to see this type of news come out for the next couple of months. Barkin highlighted data showing a drop in job growth and postings, while unemployment claims filings have remained mostly steady. With the upcoming meeting early December by the FED, many are still betting on a .25% cut.
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