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The pandemic bull market in equities boosted insolvent state and local governments, but the good times are coming to an end. A new report on Tuesday showed that government pension funds suffered their biggest losses since 2009 this year, which will likely mean higher taxes for the citizens of Illinois, New Jersey and California.
Wilshire Trust Universe Comparison Service reported Tuesday that public pension plans lost a median 7.9% in the 12 months that ended June 30. Most losses occurred this spring as the Federal Reserve began tightening monetary policy and markets gyrated amid economic and geopolitical uncertainty. The Fed’s easy money had lifted government pension funds by inflating asset prices, but the good times had to end as inflation soared.
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