Ag Financial Headlines, Wednesday October 26, 2016

Federal Reserve Member Looking to December for Next Rate Boost

Federal Reserve Bank of San Francisco President John Williams says the best time for the U.S. central bank to raise rates again likely will be at its policy gathering in December. Williams still expects one rate increase this year, and says it could happen at either of the two remaining rate-setting Federal Open Market Committee meetings in 2016. However, he says it could be better to wait a bit longer to boost what is now a 0.25 percent to 0.50 percent overnight target rate range, according to Pro Farmer’s First Thing Today. That is because Fed Chairwoman Janet Yellen will have a press conference at the December meeting, but not at the gathering scheduled for November. Williams says: “We can always take policy actions at any meeting, but I think there are some advantages, in my own mind, around a press conference.”

Estate Tax Proposed Changes Would Lose Court Battles

A Kansas Farm Bureau representative and agriculture law professor says proposed changes to the estate tax would likely be struck down if finalized and litigation followed. Roger McEowen predicts that if the Internal Revenue Service finalized a proposal that would crack down on a tactic for family operated companies to reduce asset values to skirt the estate tax, plaintiffs suing the agency are likely to prevail. Politico reports that the IRS proposal, in general, would end most of the so-called valuation discounts, which can be applied to intra-family transfers of interest when there are restrictions attached, such as on liquidation and voting rights. The American Farm Bureau Federation and its state organizations, including Kansas, plan to request the IRS scrap the entire proposal. McEowen says the issue has been a source of litigation against the IRS, and courts have routinely held that the valuation discount is reasonable.

Source:  NAFB News