Two Important Data Trends & Saying Goodbye

I. The history of the  overnight Federal Funds rate from 1954 through 2022 is shown in the chart below.   The sixty-eight year average: 4.62%.  The latest update for March 2024: 5.33%.


II. Interest payments on US Treasury debt surpasses a trillion dollars in 2023.  The total interest paid last year was $1,062 billion.

From the Visual Capitalist article: “The cost of paying for America’s national debt crossed the $1 trillion dollar mark in 2023, driven by high interest rates and a record $34 trillion mountain of debt. . . As debt payments continue to soar, the Congressional Budget Office (CBO) reported that debt servicing costs surpassed defense spending for the first time ever this year.

Questions: What do these two datapoints suggest about the future level of interest rates?
On February 15, 2024 the NCUSIF Investment committee bought a six year, three month $650 million bond yielding 4.26%.  Is NCUA repeating the same IRR mistakes that led to the Fund’s two plus years of current  under performance?

Learning to Say Goodbye

A final selection from He Gets Us campaign.  The use of stories to communicate values.

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