A Modest Uptick In October Employee Layoffs. I Expect Layoffs To Spike Higher In January.

Layoffs have ticked up in October as compared to September. I expect a step function up in layoffs in January 2024 as I believe that a number of CEOs, CFOs and Boards have yet to find religion around higher interest rates. We are not going back to a zero percent Fed Funds rate in Q1, Q2 or at all in 2024.

Layoffs: https://layoffs.fyi/

• The Fed will lower its Fed Funds rate in 2024, but I don’t believe that zero percent is in the cards. The Fed has no choice but to lower rates as the United States has $34 trillion in Treasury debt.

Treasury debt outstanding: https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny

• 11% of fiscal 2023 spending went to paying interest on the Treasury debt. That number will be much higher in fiscal 2024 if the Fed Funds rate remains elevated and if we continue to see long yields remain elevated.

• The last thing the United States needs is for the average interest rate on the $34 trillion debt mountain to reach 5% (the average interest rate on the Treasury debt as of September 30th was 2.97%).

Average interest rate on fiscal debt outstanding: https://fiscaldata.treasury.gov/datasets/average-interest-rates-treasury-securities/average-interest-rates-on-u-s-treasury-securities

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