The Federal Reserve Board Open Markets Committee left short-term interest rates unchanged at today's meeting.
Steven Gordon, director-fixed income at Warren Nadel, said the investment community was not expecting any tightening now. But some Fed watchers believe a modest increase may be on the horizon early next year, he said.
Piper Capital Management will be merged into First Asset Management when U.S. Bancorp's acquisition of Piper Jaffray Cos. is completed in the second quarter of 1998.
The combined firm, to be called First American Asset Management, will have $68.7 billion under management. Details about how the firms will be integrated are not yet available, said U.S. Bancorp spokesman Dave Walsh.
Piper Capital has $12.7 billion in assets under management, most of which are in mutual funds. Piper Capital CIO Paul Dow is expected to stay on with the merged firm.
First Asset, owned by U.S. Bancorp, has about $56 billion in assets under management, also mostly in mutual funds.
Standex International Corp., Salem, N.H., is conducting an asset allocation study of its $150 million defined benefit plan. The review should be finished in the next couple of months, said Thomas DeWitt, executive vice president of administration. The plan's current target asset mix is 65% equities and 35% bonds. New England Pension Consultants is assisting.
The PBGC is changing the way it recoups overpayments of benefits. In cases in which the agency has overpaid benefits to workers, it will cut monthly benefits only long enough to recoup the overpayment. Benefit payments will be raised once the money is recovered.
Under the current system, the agency estimates benefits for retired workers of pension plans it takes over then figures out the benefits it actually owes. When the agency overpays benefits, it recoups the money by permanently cutting future monthly benefits - usually by no more than 10%. PBGC Executive Director David M. Strauss said the changes are intended to make sure no worker repays the agency more than is owed.
