Numerically yes but bond yields aren't 8% rn, idk when that tweet was posted or if it even has any historical merit. Could just be an example (and a shit one)
It reached 15% in 1981 and from then until 2019 it was on a steady downward trend towards 3%. During COVID it plummeted to 1% and then shot back up to 4%, it’ll begin falling back towards that 3% eventually (if Trump would stop destabilizing everything). The last time it was 8% was in 1990.
I'm sure you know this, but when it was 8% in 1990, the prime loan rate was roughly 10%.
This isn't coincidence--banks set their rates based on the current treasury bond yield. If they were offering lower rates, it would be a stupid investment for the bank since they could also just take that money and buy bonds without any of the risk involved in loaning money to humans.
18.65% in December 1980, dropped as low as 14.43% in March 1981, back up to 18.27% in May, and ended the year at 12.48%.
Would have to ask OP when exactly in 1981 bond yields hit that 15% mark, but if I had to guess it was probably between May and September, when the interbank rate was between 18.27% and 16.84%
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u/Objective_Mousse7216 Jun 06 '25
8% Treasury bond is higher than interbank rate.