A Long-Term Look at Interest Rates

The chart below provides a historical look at the yields of various Treasury instruments as well as Moody’s yields. Some of the data dates back to 1790.

In the case of the 10-year note, the following data sets have been spliced together:

  • 1790 to 1831: 3% British Consols
  • 1831 to 1919: High Grade Long-Term Railroad Bonds
  • 1919 to date: Federal Reserve 10-Year Constant Maturity

Also of note on these charts are the recessions shown in gray. While the National Bureau of Economic Research dates recessions back to 1854, various unofficial sources such as the Cleveland Trust Company Index were used prior to that.

When shown visually in this manner, it is interesting to see how much rarer and shorter recessions have become since the Great Depression. Perhaps the abandonment of the gold standard in 1933 allowed the Federal Reserve more flexibility in managing the economy.

 

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