Broker Check

Are Interest Rates Really High?

| November 06, 2023

It all depends on the time period you consider for comparison purposes. The following charts show the yield on the 10-year Treasury Bond from 2 different time periods.

The first chart shows the past 10 years. Clearly, the trend is up, although there was the Covid induced drop in 2020. Since then, rates have gradually increased with this year’s rates being the highest in the past 10 years. This has caused an increase in what banks pay you on your bank deposits (savings accounts), but it has also increased what you pay for new loans (car loans, mortgages, home equity lines of credit, etc.).


The second chart shows rates from 1962-2023. Although the current 10-year trend is upward, the 4+ percent is relatively flat when compared to the last 30 years since 1992, and relatively low when compared to the last 60 years since 1962.


The Federal Reserve is doing all it can to combat inflation in an attempt to bring it back toward their target of 2%. Even when they do, we are more likely to see interest rates in the 3-5% range than below 3% as we have for much of the past 10 years.

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