A bar chart showing peak and average real interest rates during Federal Reserve rate-hiking cycles from 1961 to the present. In all such previous periods—1961, 1967, 1972, 1977, 1980, 1983, 1987, 1994, 1999, and 2004—the average and peak real rates have both been positive; the median average real rate has been around 3%, and the median peak real rate has been around 4%. In the current hiking cycle, through the first half of 2023, the average real rate has been negative, at around –2%. Vanguard projections show the average real rate turning positive in the first half of 2024.