Tuesday, February 14, 2012

Long Term Treasury Rate 1871 - 2011

Will the long term Treasury Rate go as low as 2% ?

Sources: Federal Reserve Board, Homer & Sylla, Hoisington Investment Management

At the bottom of the 54 year interest rate cycle real rate gravitates towards 2%.

Notice that you had 10 or more years in the late 19th Century and early 20th Century when long Treasuries got to 2% or less.  Deflation in the aftermath of the huge buildup of debt in the 1860s and 1870s ?

Geir Solem
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