By: Jeff Anderson
|Close||Weekly return||YTD return|
|US Treasury 10yr Yield||4.224%|
Source: Wall St. Journal
Equity markets capped off a strong week Friday by rallying immediately after the Wall Street Journal reported that there might be some deliberation amongst Fed officials about the path of interest rates after the expected 75 basis point hike at the next Federal Reserve Open Market Committee decision on November 2nd. This kind of information must be taken with a huge grain of salt. For one, the Journal was quoting one governor’s comments that was made weeks ago. It just kind of smells. Yes, Fed officials are always being asked for a comment. And yes, they all have egos. They all want to be heard. The media will put all these sound bites, and hand-picked data points into their pretzel-making machine and spit out its own twisted narrative. I’m not saying it isn’t factual. It’s just misplaced. In the end, it’s just conjecture. Guessing. Hoping. Maybe even praying. However, there will come a time when the Fed stops raising interest rates, and possibly even cuts rates. Today’s action shows how eager the market is for a Fed pivot.
The IRS Makes Changes, Thanks to Inflation:
Look for meaningful changes to tax rates in 2023, thanks to a four-decade-high inflation rate. Income tax brackets, standard deductions, annual gift tax exclusions, and even estate tax thresholds are all moving up. All of them are increasing by 7%. Individual taxpayers in the 22% federal tax bracket will see that limit increase from just over $89,000 to $95,375. The standard deduction for married couples will jump to almost $28,000. The annual gift tax exclusion increases $1,000 to $17,000. The estate tax limit jumps to $12.92 million from $12.06 million per person, and nearly $26 million for a married couple.
For us working stiffs, we should see lower tax withholdings as soon as this coming January.
photo: wsj.com (Chip Somodevilla/Getty Images)
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