The average Federal Funds Rate from 1955 to 2023 is 4.62%

We are now in a normal regime of elevated interest rates, welcome to the 2020's.

James Van Straten
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James Van Straten
This article was published 3 years ago. Some details may no longer reflect current market conditions or recent developments. If you spot anything that needs an update, contact us.
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Quick Take

  • The average Federal Funds Rate from 1955-01-01 to 2023-05-17 is 4.62%. We are now in a normal regime of interest rates.
  • The issue now becomes the total debt to GDP — which is roughly 120% — so as rates stay elevated, it will cost more to service the interest.
  • As it becomes more expensive to service the debt, this will eat into other sectors and shrink their pie, such as health care and education, and society will break down further.
  • Looking out to FY 2032. interest costs are projected to hit $1.2 trillion, which will be the largest expenditure program, surpassing Medicaid ($789 billion) and defense ($990 billion).
  • The only way would be to grow GDP ahead of the debt securities and liabilities, but that looks extremely unlikely — especially with an aging population and declining population.
GDP vs interest: (Source: FRED)
GDP vs. interest: (Source: FRED)
Fed Funds: (Source: FRED)
Fed Funds: (Source: FRED)
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James Van Straten
James Van Straten
Former Lead Analyst CryptoSlate

James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century's paramount invention.

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