1,000 YEARS OF INTEREST RATES
1000 AD → 2026 • From Byzantine legal limits to Volcker's 16.4% to ZIRP • 9 supercycles identified
Sources: Homer & Sylla "A History of Interest Rates" (4th ed) • BoE Chief Economist Andy Haldane 5000-yr study • Hills/Thomas/Dimsdale (BoE) • NBER Macrohistory • FRED
Interest Rate (dominant market)
Rising Cycle
Falling Cycle
THE 9 SUPERCYCLES OF THE LAST MILLENNIUM
THE GRAND PATTERN: 4 MULTI-CENTURY WAVES
Wave 1: Medieval → Renaissance (1000–1500)
500 years. Rates started at 10–20% during the Crusades era, then Italian banking innovation (Venice prestiti, Florentine deposits, montes pietatis) gradually drove them to ~5% by 1500. The first great financial revolution.
Wave 2: Price Revolution → Dutch Golden Age (1500–1680)
180 years. New World silver caused a "Price Revolution" that pushed rates up to 12%. Then Dutch financial innovation (Amsterdam Exchange, Holland rentes) drove rates to an unprecedented 3% — the world's first modern capital market.
Wave 3: Colonial Wars → Pax Britannica (1680–1900)
220 years. Wars with France drove rates up to 5–6% (BoE founded at 6% in 1694). Then the longest decline in history: British hegemony, gold standard, and Victorian capital abundance pushed rates to ~2.5% by 1900.
Wave 4: Modern Era — Fed, Fiat Money, QE (1900–2026)
126 years and counting. The Federal Reserve era saw the most extreme swing in recorded history: 3% → 16.4% (1981) → 0.08% (2021). Both the peak and trough were unprecedented in 1,000 years. Are we now at the start of Wave 5?
Pre-1694: Rates from dominant money market of era (Homer & Sylla): Byzantium → Italian city-states → Netherlands. 1694–1918: BoE discount rate / UK consol yields. 1919+: US Fed Funds / Treasury yields.
Pattern insight: Each supercycle's peak has been progressively less extreme since the medieval era — except the 20th century, which produced both the highest (16.4%) and lowest (0.08%) rates in 1,000 years.