President Obama to nominate Janet Yellen for Fed Chair. Yellen has strongly supported the Fed’s unconventional easing measures in recent years, and we expect that her nomination will therefore be interpreted as favorable to duration and carry trades. Yellen has described an “optimal control” framework, which could indicate a coming revision to the current structure Read More
The Columbia Management Perspectives blog offers our insights on current market events and investment opportunities.
The 3.8% net investment income tax applies to certain trusts and estates. Given the lower income thresholds for reaching higher tax brackets in a trust, it is possible that income or capital gains retained by the trust will be taxed at higher rates than if the income or gains were distributed to beneficiaries. The Columbia Read More
The outlook for quantitative easing remains difficult to gauge. We see decent odds that tapering begins in the not-too-distant future—primarily because we expect firm growth. If Fed officials were to revise their views on the costs and/or efficacy of QE, they may attempt to lean harder on the forward guidance tool. Last week the debate Read More
Recent comments from the Fed have provided relatively little information about future QE tapering decisions. Officials have expressed contradictory views on several major policy concerns, including the state of the labor market. If economic growth continues over the next few months, tapering may commence in December. Following their surprising decision to maintain the current pace Read More
Self-employment income may be included in an individual’s net investment income, or may raise modified adjusted gross income beyond the net investment income threshold. Business owners may be able to reduce exposure to the net investment income tax by establishing a qualified retirement plan, and characterizing a portion of business earnings as pretax contributions to Read More
Small business owners can potentially mitigate the effect of the new 3.8% net investment income tax (NIIT) by establishing or updating a retirement plan for their business. Strategic use of tax-advantaged retirement plans may prevent one from breaking through the MAGI income threshold for the NIIT strategy. The Columbia Management Learning Center is dedicating a Read More
By Ty Schoback and Michael Taylor, Senior Analysts, Tax-Exempt Fixed-Income Research In 2010, public ratings agencies upgraded en masse, or “recalibrated,” tens of thousands of municipal bonds without without a formal review of each obligor’s underlying credit characteristics. Recently, Moody’s and S&P announced new revisions to their General Obligation (GO) rating methodologies. S&P’s revision is Read More