Broker Check

Market News & Commentary - From The Desk Of David Loesch 09.22.2022

September 22, 2022
  • Jerome Powell and the Federal Reserve Open Market Committee announced a 75-basis point increase in the Fed Funds Rate to a 3%-3.25% range, the highest since 2008. The announcement further forecasted Fed Fund projections for year-end 2022 – 4.4%, year-end 2023 – 4.60%, year-end 2024 – 3.9%, 2025, and longer-term – 2.50%. These projections indicate the Fed expects inflation to remain high and above its target rate for several years.
  • Colorado taxpayers can now pay their taxes in Bitcoin, Ether, and other cryptocurrencies under a one-of-a-kind state tax payment program in conjunction with PayPal, the state's Department of Revenue said Tuesday. Businesses and individuals can use cryptocurrency assets to pay tax duties under Colorado's primary tax programs, including individual income tax, business income tax, sales and use tax, withholding tax, severance tax, and excise fuel tax.
  • US home values declined the most since August 2011 last month as soaring mortgage costs pressure buyers to hesitate over making a purchase. The typical home value fell 0.3% in August from a month earlier, following a 0.1% decrease in July, online housing marketplace Zillow Group said in a report Monday. The spike in mortgage rates in recent months has raised the monthly mortgage payment on a typical newly purchased home — including insurance and taxes — to $1,643, a jump of 83% from August 2019, Zillow said.
  • Roughly $1.7 billion of long-term Munis may hit the market this week, about 80% below this year's average, data compiled by Bloomberg show. Issuers seem reluctant to commit to sales: Scheduled supply for the next 30 days now tallies $4.9 billion, the lowest since Jan. 4th.
  • Goldman Sachs cut its US economic growth estimates for 2023 after recently boosting its predictions for Federal Reserve interest rate hikes. US gross domestic product will increase 1.1% in 2023, economists including Jan Hatzius wrote in a note Friday, compared with a forecast of 1.5%. Goldman raised its Federal Funds Rate forecast by 75 basis points over the last two weeks for a terminal rate forecast of 4% to 4.25% by the end of 2022. The projection for 2022 was left unchanged at 0%.
  • California drew in 11% less in personal income tax revenue than expected this year, the latest warning sign for the finances of a state whose fortunes are closely tied to the performance of markets. Total revenue collections through August, the second month of the 2022-2023 fiscal year, came in about 8% below the forecast, according to a bulletin from the California Department of Finance.
  • Puerto Rico's financial oversight board is seeking to continue negotiations with bondholders of the island's bankrupt power utility even as the workout process inches toward litigation after the parties failed to strike a debt-cutting deal. While the board wants to continue negotiating with bondholders, it filed a proposed litigation schedule Friday, a first step closer to a legal battle over how much creditors should be repaid. Puerto Rico officials and bondholders could not agree on reducing PREPA's $9 billion debt by the deadline. The impasse will prolong the power utility's five-year bankruptcy, which has already been delayed by the pandemic, and will increase its legal and consulting expenses.


David Loesch

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