Year-end tax planning is more important than usual because it occurs concurrently with a turning point in U.S. tax policy. For the first time in 40 years, taxes on income and wealth transfers are headed higher.
The first half of 2022 was a brutal slog for investors with relatively few places to hide. Stocks and bonds simultaneously faced steep price declines amid extreme volatility. However, in July we witnessed a major turnaround in the stock markets and digital assets despite aggressive rate hikes and mounting evidence of a recession. Markets around the world bounced back, posting the best month since 2020. Moreover, July's headline and core CPI inflation rates were lower than expected, consistent with our view that inflation is peaking, but at 8.5%, still remains too high.
