The Federal Reserve has indicated they will keep interest rates near zero for a considerable length of time. Our first article this week goes into the reasoning behind the Fed’s position and the doubt among officials that they will sustain it. Another issue of concern to the Fed is the benchmark for inflation expectation. As it nears 3%, we include an article from Bloomberg about its effect on Treasury securities. Our third article discusses major changes, effective March 1, 2013, for motor vehicle taxes in Georgia. We will soon transition from sales taxes and annual ad valorem taxes to a system of one-time ad valorem taxes. We conclude this week with a look at how the average age for retirement is changing. We’re seeing a significant increase in the number of people who are delaying retirement.
Fed’s Ability To Hold Rates Near Zero Is Questioned– The Federal Reserve has made a commitment to hold short-term interest rates at or near zero for a considerable time. However, officials are raising doubts about whether that will be possible. https://mninews.marketnews.com/content/repeatofflsothers-doubt-fed-can-hold-zero-ffr-ylds-rise-2
Inflation Expectation Are Increasing– Investors’ losses on the 30-year U.S. government bond have topped 5% this year. Buyers of Treasury securities are bracing for accelerating inflation as the Federal Reserve’s benchmark for inflation expectation nears 3%. http://www.bloomberg.com/news/2013-02-06/u-s-30-year-bond-losses-pass-5-as-fed-price-gauge-rises.html
Motor Vehicle Tax Changes in Georgia– Beginning March 1, 2013, state and local sales tax will no longer apply to the purchase of a motor vehicle (except for the 1% TSPLOST on the first $5,000 of any vehicle sale in regions that have this tax). In addition, all vehicle sales or ownership transfers after this date will no longer be subject to the annual ad valorem tax. Instead, there will be a new, one-time state and local title ad valorem tax (TAVT) that is paid at the time owner registers the vehicle and applies for the title with the county. http://www.accg.org/library/2013_01_16_Transition%20Explanation.pdf
Percentage Of Americans Delaying Retirement Increases– About 62% of Americans 45 to 60 years old plan to delay retirement, according to a Conference Board report. That’s a dramatic increase from 42% two years ago. Last year, workers aged 60 and older accounted for 29.4% of the U.S. civilian labor force. http://online.wsj.com/article/SB10001424127887323926104578276241741448064.html?mod=dist_smartbrief
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John R. Day, Bill Ennis and Stephanie Davidson