A matter of perspective

It is all a matter of perspective.

After more than four decades of declining interest rates — and with rates close to zero only five years ago — a US 10-year Treasury yield around 5% feels high. The 10-year stood at roughly 4.96% yesterday.

But viewed over more than two centuries, today’s level looks remarkably normal. The long-term average since 1800 is around 4.5%.

The anomaly was not today’s interest rates. It was the era of free money.