Capitalization

Q. I am writing a report for a U.S. government agency. My contacts want me to capitalize “federal,” as in “Federally funded.” This looks incorrect to me. I couldn’t find a specific rule in the Manual, though the examples I saw seem to support my opinion. I would appreciate your guidance. Thanks!

A. Chicago does not cap “federal,” since it’s not a proper noun, but it’s common for a company to toot its own horn by capping company-related terms (like “the University”), and the government is no different. If the agency’s house style is to cap it, then that’s all you need to know.