By Michael S. Derby Feb 12 (Reuters) - The Federal Reserve is on track to continue forward with sizable Treasury bill buying into the spring but it is ‌unclear what happens after the annual tax filing date has passed, an official ‌who helps manage the implementation of monetary policy at the New York Fed said on Thursday. The official, Julie Remache, ​who is deputy system open market account manager and head of market and portfolio analysis at the regional Fed bank, was addressing the outlook for so-ca ...

Core Viewpoint - The Federal Reserve is initiating Treasury bill purchases exceeding $200 billion over the next 12 months to alleviate pressures in money markets, with an average expectation of net purchases around $220 billion from survey respondents [1][3]. Group 1: Federal Reserve Actions - The Fed decided to commence Treasury bill purchases after identifying that reserves in the financial system had fallen to levels deemed insufficient, as indicated by rising short-term funding costs [2]. - The Fed plans to buy approximately $40 billion of T-bills monthly, having already purchased about $38 billion this month, with additional operations scheduled for January [4]. - The decision to halt the reduction of its balance sheet, known as quantitative tightening, was made in response to increasing signs of stress in the $12.6 trillion repurchase agreement market [6]. Group 2: Market Conditions - Rising money market rates have been observed, increasing more rapidly compared to the Fed's administered rates than during the previous balance-sheet unwinding period from 2017 to 2019 [5]. - Concerns have been raised regarding inadequate liquidity potentially disrupting essential financial market functions, which could undermine the Fed's rate-setting capabilities and lead to broader market implications [7]. Group 3: Reserve Management Strategy - The December meeting minutes revealed discussions among Fed officials on targeting an appropriate level of bank reserves, with some suggesting a focus on money-market rates relative to interest on reserve balances rather than a specific reserve level [8].

Central Bank Gold Purchases - Goldman Sachs anticipates a significant increase in central-bank gold purchases for November, driven by a shift in reserve management as policymakers hedge against geopolitical and financial risks [1] - Goldman's estimates indicate central banks purchased 64 tons of gold in September, a notable rise from the 21 tons projected for August, suggesting strong buying momentum through year-end [1] Reporting and Transparency Issues - A large portion of central bank gold purchases remains unreported, with the World Gold Council estimating that only one-third of global central bank buying is reported to the IMF, down from approximately 90% four years ago [2] - China's official monthly disclosures show minimal purchases, with only 1.9 tons reported in August and July, and 2.2 tons in June, leading analysts to believe these figures do not reflect actual buying [3] China's Accumulation Strategy - Société Générale estimates that China could accumulate up to 250 tons of gold this year through trade flows, accounting for over one-third of global central-bank demand [4] - China's strategy involves minimal disclosure of gold purchases to avoid potential repercussions from the U.S. administration, as gold is viewed as a hedge against the U.S. [6] Market Dynamics and Price Outlook - The reluctance to report gold purchases is linked to a desire to prevent front-running in an increasingly illiquid market, with delivery timelines in the London Bullion Market Association extending up to eight weeks [6] - Despite a strong performance in gold prices, institutions are optimistic about continued outperformance, with Goldman projecting a target price of $4,900 for gold by 2026 [7]

Financial Data and Key Metrics Changes - The company reported an adjusted net operating loss of $40.8 million or $0.99 per share for Q4 2024, and a net loss from continuing operations of $92.7 million or $2.25 per share, largely attributed to retroactive reinsurance structures [22][23] - The investment portfolio generated $93.1 million of net investment income from continuing operations, a 10.8% increase over 2023 [8] - The accident year combined ratio for the E&S segment was 91.8%, while excluding legacy structure purchases, it would have been 89.3% [11][25] Business Line Data and Key Metrics Changes - The E&S business grew by 2% in Q4, but if excluding the excess casualty unit, growth would have been 11.2% across the remaining divisions [14] - The Specialty Admitted segment generated a combined ratio of 95.3% for Q4 and 92.2% for the full year, with underwriting profit growth of 68.6% over the prior year [18][19] Market Data and Key Metrics Changes - Submission growth reached 9% for Q4 2024, with record highs in new and renewal submissions over the last four years [9][40] - The company experienced a positive renewal rate change of 9% in 2024, reflecting strong market momentum [12] Company Strategy and Development Direction - The company aims to focus on its insurance business following the divestiture of its Bermuda reinsurance operation and has executed several transactions to validate its balance sheet [7] - Plans for redomestication and improvements in technology and processes are expected to enhance organizational efficiency [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about profitability in 2024 while monitoring loss emergence as the accident year seasons [17] - The company anticipates a mid-teen operating return on tangible common equity for 2025, underpinned by a similar accident year loss ratio to 2024 [28] Other Important Information - The company completed a strategic review and reaffirmed its rating, which is expected to provide additional tailwinds into 2025 [42] - The company did not experience any net losses due to California wildfires and maintains a conservative property stance [34] Q&A Session Summary Question: What is the trend looking like for submission growth in 2025? - Management noted an increase in submissions and healthy growth across several divisions, with a reported 9% submission growth for Q4 2024 [40][42] Question: Can you provide insights on the loss picks and trends? - Management indicated a slight increase in loss trends, particularly in excess casualty and general casualty, but overall loss trends remain in the low single-digit range for 2025 [44]