As 2022 comes to a close, I find it useful to see just where we stand, financially speaking. When the year began, 30 yr. mortgage rates were as low as 3% and a third $1400 stimulus payment had been authorized. Having endured 3 years of Covid lockdowns, and restrictions, we were then treated to the highest inflation in modern times…at 8 % (but nothing like Great Britain at 10% during the same period.) Adding to this, Russian aggression in Ukraine, and OPEC reducing output of oil, driving gas prices higher, the administration authorized the release of some 180 million barrels of oil from the Strategic Petroleum Reserve (SPR) to ease the “pain at the pump” The Fed ( Federal Reserve Bank ) was then forced to intervene with numerous interest rate hikes to try and slow the Inflation Monster, which in turn increased interest rates from auto loans to credit cards, and most notably Mortgage rates ,(the 30yr rate rising to 7%) But relief was in sight…….
By early Fall, the Social Security Administration (SSA)announced an 8.7% cost of living adjustment (COLA) for recipients beginning in 2023; and the “pause” in Student loan payments (set to expire Dec 31) will be extended through June 2023. At this writing, Inflation is down to 6.5% ; likewise the 30yr mortgage rate, not to mention that unemployment is at a 50yr low…3.7% .More notably, gas prices have begun to fall below $3 gallon in some areas…for everyone who drives a car; and , for everyone who pays Federal income taxes, the government has just announced a 7% increase in the limits of each tax bracket, whereby a couple with filing status married filing jointly (MFG)with a taxable income of $83,550 for 2022 ( 12% bracket limit ) will pay a minimum 22% tax on every dollar beyond that limit. However, beginning in 2023, Its limit rises to $ 89,450, shielding nearly $6000 from that 22% rate.
All in all, despite individual and retirement investments down nearly double digits, there are glimmers of hope, that the worst could be behind us, that maybe, just maybe we can see the (light at the end of the tunnel) ….we all could use a sense of normalcy after such a tumultuous year.
Cents Maker