If You Ask Me: A Global Banker Reflects on Our Times
Wriston, Walter B.
Some Simple Facts about Interest Rates
Would you like to comment on fluctuating interest rates?
Interest rates in the world are constant. You see all kinds of numbers, depending on which economist you listen to, but for the past one thousand years the actual cost of borrowing money has been roughly 3 percent-- inflationary expectations.
Thus, if you perceive that the inflation in this country is running at 10 percent, you can look forward to a 13 percent interest rate.
As far as the rate for short term borrowing goes, it's marginally back on a real basis. In other words, with an 11 1/2 percent prime rate and a 10 percent inflation rate, we get a 1 1/2 percent real return before expenses, which isn't all that exciting. I would guess the rates are going to go up slightly, before the economy peaks and we start down into a recession. Then I expect the short-term rates to fall rapidly.
But I also expected Tom Dewey to be President of the United States.
 The rate that banks were charging their most creditworthy corporate customers on April 6, 1979.