The Most Important Chart to Watch in 2024

This chart, right here, has always impacted our economy. By watching this chart and being able to foresee where it is headed, you’ll be able to navigate how and when to spend your money to get the best value out of your dollar. Hence, making yourself more wealthy. If you’re able to spend more with the same dollar amount, you, therefore, become more wealthy. And by understanding this chart, we’ll actually be able to know when your dollar is more valuable.

Without further ado, let’s get straight to it. So, the part that I’m speaking about – what is the Fed Fund Rate? It’s called the Fed’s Fund Rate. And if you haven’t heard of it, let me explain. This is the overnight rate in which banks lend cash to one another, and the Federal Reserve has a set limit on the upper and lower rates. We often hear the Federal Reserve controls interest rates. The truth is they don’t control interest rates; they only control one interest rate. And by controlling this single interest rate, they often have an impact on all of the other interest rates.

Now, you probably know where I’m headed – the Fed’s Fund Rate. The word “rate” is in the chart itself. So yes, this is the interest rate that I’m talking about. If the interest rates exceed the limit given by the Fed between banks, they will intervene with the necessary cash and/or collateral to keep it within their Fed Fund Rate cap.

So when you hear mortgage rates are up, car loan rates are up, credit card rates are up (which have been at an all-time high over the last decade), it does not mean that the Federal Reserve has raised the rates on mortgages and all those other things I just said. What it means is that the entity that’s issuing those loans now has to raise their rates to compensate for whatever the rate is given by the Federal Reserve. Because the whole point of an interest rate is to make money in the end for loaning the money. That’s the purpose of taking on any type of risk – so you can yield some type of benefit in the end.

The Federal Reserve directly has an impact, or rather influence, over what other rates will be. But really, they don’t have the power to change any of those rates. They just have to keep rates within their limit on the upper end and on the lower end.

So, put simply, the Fed’s Fund Rate is a place where you could track the Federal Reserve interest rate. And this rate is the interest that they’re getting back on the money that they’re lending to banks. Not the interest rate that’s going around amongst all other loaning vehicles like everything I mentioned.

Now, let’s look at what the interest rates are actually showing us. Here we have the Federal Funds Rate Chart – funds rate. And if you want to track this for yourself, this is the website up above to do so: Freds Solutions fed.org. Now, looking at the chart, this blue light here is showing where interest rates are and have been. Currently, we are sitting at 5.33% interest on the money that’s being lent from the FED to other commercial banks. And all these green patches are where recessions have happened. As you can see, the last one that we had was around 2020 when all that craziness was going on.

But a more interesting approach is looking at the gaps in between the recessions. If you notice, they’ve all been about 10 years apart, roughly. Look at this one here from 1980 to 1990; there was a gap of recessions. And of course, there was one in the middle of that, but that was just the overall deflating of the initial recession back in 1980. And then again, you have from 1970 to 1980; that’s another decade. And then again, let’s go to more current times. So, we have from 2000 over to 2010. And since 2010, they dropped rates to basically zero, as you can see. And they held this zero for quite some time. And in fact, during that time, you would have had far more yield on anything that you borrowed because there’s not really any interest tied to it. So, money was really cheap.

This is what I mean by watching these rates. It will allow you to know when you could be able to afford more things because you’re not going to have to pay a lot more in the end. But one thing I’d like to note here as well is you could see shortly after large rate hikes comes a dramatic rate cut. And oftentimes on the rate cut, there is always a recession that follows right after. So right now, we’ve had a dramatic rise in rates. And this only leads me to believe that maybe not now, maybe not next year, but very shortly we’re going to have some type of cut, possibly that could potentially lead to some type of recession.

But often stimulating the economy to take on more loans, take on more debt, which often helps the economy come out of a recession. So it’s very important to watch this chart because knowing where the rates are and knowing where they’re headed, like for instance right now, we could see we’re at the 5% area. The last time we were at the 5% area was back in 07. So, it’s been quite a while since we’ve seen rates this high. Now, how long can we hold this rate for? I’m not sure. But what I am doing is actively watching every time they have the FOMC meetings to discuss where rates are headed and pay attention to see where they’re going to go, whether it’s going to be higher or lower. And then that ultimately allows me to know what to do with my money.

Looking through that chart, there’s tons of insights on what to do and when to do it when the time comes. So, us sitting at over 5%, not sure how long we can hold it for, but what I am sure of is when they move, I will be aware of when they move. And then I will know how to navigate myself through the economy to get the most for my buck. It’s super important to pay attention to these rates.

Now, regardless of the rate, you should yourself be taking accountability to at least outpace whatever the interest rate is. And what I mean by that is your portfolio’s performance. One thing that I’m doing to beat what interest rates are currently at is utilizing a trading algorithm from NERP called the FED bot. And if you haven’t seen the series, the link is up below; go ahead and watch that. I put $50,000 into an account which has already grown over 10%. And in fact, a lot of the community has seen way more gains than that. And I have it in a very conservative setting.

Utilizing this software, I’m far outpacing interest rates, and I’m far outpacing inflation. And the reason why I bring up inflation is because oftentimes inflation and interest rates have a large correlation. The FED has a couple of tools in its box. They have quantitative easing and quantitative tightening, both of which go into moving rates and stimulating the economy with more money and more cheap cash. And the other goes with raising rates and making it harder to get cash because they don’t want you to take on more debts. So, it’s important to keep track of all this so you know that you need to make x amount in a year span to just beat the malpractice of central banking.

If you’re interested in the one that I’m using, hit the link below. Like always, my friends, I’ll see you on the next one.

To watch the full video, please visit The Most Important Chart to Watch in 2024!

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