When the Tax Cuts And Jobs Act (TCJA) was signed into law on December 22, 2017, it was the most sweeping rewrite of U.S. tax law since the Tax Reform Act of 1986. Now, it’s about to be undone.
Federal Reserve policymakers voted to keep lending rates unchanged but suggested one more rate hike might be implemented before the end of 2023.
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Medicare is not driving the nation off a fiscal cliff, according to an analysis by The New York Times (NYT). Contrary to projections by the Congressional Budget Office (CBO), the nation’s nonpartisan budget research agency, The Times says the huge threat to the U.S. budget posed by Medicare spending has receded.
The Federal debt is projected to increase to 110% of the size of the economy in 2032 — higher than it’s ever been. In the following two decades through 2052, growing deficits are projected to push the federal debt much higher still, to nearly twice the size of gross domestic product. Based on these projections from the nonpartisan Congressional Budget Office, it’s fair to say the interest owed on the federal debt skyrockets and becomes unsustainable by 2052.
Year-end tax planning in 2023 can make a big financial difference in retirement funding and how much you leave your heirs. Here are some tips, situations, and useful ideas written by a real human with decades of experience in year-end tax planning maneuvers.
The law of the hammer is a cognitive bias to treat every problem as if it’s a nail. People do it with money. As financial professionals, however, we want to be clear that money won’t buy you a fulfilling retirement.
Clients come to us for technical financial and tax advice. Surprisingly, helping them define and achieve NON-financial goals is what often makes their lives more fulfilling.
Crypto investors have an unusually good opportunity to harvest their tax losses by the end of 2023.
The five questions below are a challenge and an effort to allow you to assess your knowledge of current financial economic conditions. If you have been following our news stream, this quiz draws on familiar ground. The answers are below, along with additional resources and documentation related to the answers.
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Amid 2Q '22 Turmoil, Fed’s Robo-Economist Forecast Was More Accurate Than Leading Economists
Published Tuesday, August 2, 2022 at: 9:47 PM EDT
In the three tumultuous months of the second quarter, the Federal Reserve of Atlanta’s algorithm for estimating quarterly economic growth was far more accurate than consensus forecasts by leading economists. That’s unusual.
The Atlanta Fed’s GDPNow predictions are sometimes wildly wrong. Though consensus forecasts of economists are far from perfect, the humans have been more reliable than the GDPNow algorithm.
The Fed’s GDPNow forecast is updated two or three hours after the government releases economic data throughout every quarter. GDPNow’s prediction is designed to come closer to the actual growth rate announced by the BLS as the end of a quarter nears.
Although the Fed robo-economist’s track record is mixed, it was more reliable than the human experts in the second quarter, which was beset by multiple anomalies, including supply chain disruption, declining demand for inventory, and Fed rate hikes. The humans were overly optimistic for nearly the entire quarter.
There are two highly credible surveys of leading economists: a quarterly poll of 60 economists by The Wall Street Journal, and a monthly survey by Blue Chip Economic Indicators, cited by the Atlanta Fed along with its weekly updated GDPNow algorithm.
The actual GDP for the second quarter came in at a decline of nine tenths of 1% on July 28. The Wall Street Journal’s consensus forecast of 60 leading economists, published July 17, expected growth in the second quarter to come in at about four tenths of 1% -- 1.3 percentage points higher than the actual result.
In this period of concurrent anomalies, forecasts by GDPNow were much closer to reality since early May; The forecasts human experts clung to a 3% growth prediction for months and did not revise it lower until July – and then to 2%, nowhere near the negative actual rate of growth announced on July 28.
We’re not saying that the GDPNow forecast is a breakthrough in predicting the economy, but if the algorithm is better at predicting quarterly results in periods of high economic uncertainty, it would be good to know.
Tracking developments like this is just one way we help you make long-term investments amid a changing world.
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