Real Interest Rate in the United States from 2004 to 2023

 The plot shows the real interest rate in the United States, from 2004 to 2023. The real interest rate is the nominal interest rate minus the inflation rate. It is a measure of how much purchasing power a lender earns on their investment after inflation.

The plot shows that the real interest rate has been generally declining since 2004, with a few exceptions. In 2008, the real interest rate spiked briefly during the financial crisis. In 2013, the real interest rate rose again in anticipation of the Federal Reserve tapering its quantitative easing program. However, the real interest rate has been declining again since then.

The average real interest rate over the period shown in the plot is 2.08%. The current real interest rate is 2.42%.

• The real interest rate has been negative for most of the period since 2008. This means that inflation has been higher than the nominal interest rate, so lenders have actually lost purchasing power on their investments.
• The real interest rate bottomed out in 2020, at -1.0%. This was the lowest real interest rate on record.
• The real interest rate has been rising since 2020, as the Federal Reserve has raised interest rates in an effort to combat inflation. However, the real interest rate is still below its historical average.

Overall, the plot shows that the real interest rate in the United States has been on a downward trend for many years. This is a significant economic development, and it has implications for borrowers, lenders, and investors.