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

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.

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