Perspective matters more than the number itself.
In 1999, a 6% 30-year mortgage felt cheap — because just 15 years earlier, rates were in double digits, and the decade opened near 9%. Context shaped perception.
Today's panic over 5% yields? It's coming from people whose entire careers unfolded in a sub-5% world. They've never experienced what normal looked like before central banks suppressed rates for a generation.
Historical context isn't just useful. It's essential. What feels high today was the baseline for decades. Recency bias distorts risk assessment, valuation frameworks, and capital allocation decisions.
If your frame of reference is broken, your decisions will be too.
In 1999, a 6% 30-year mortgage felt cheap — because just 15 years earlier, rates were in double digits, and the decade opened near 9%. Context shaped perception.
Today's panic over 5% yields? It's coming from people whose entire careers unfolded in a sub-5% world. They've never experienced what normal looked like before central banks suppressed rates for a generation.
Historical context isn't just useful. It's essential. What feels high today was the baseline for decades. Recency bias distorts risk assessment, valuation frameworks, and capital allocation decisions.
If your frame of reference is broken, your decisions will be too.