eli5: Why are treasury rates so low compared to historical rates?

Question

I understand that the US treasury raises rates when times are good to help strengthen the economy and lowers rates when times are bad to encourage spending to help ease the stress, but when you compare treasury rates from the past 20 years against 40 years ago its completely different. Rates in the 1980s were in the 8-9% range but even in 2018 (when things were arguably at their best) the rates were only in the 2%-3% range.

In: Economics

Answer 1

The Federal Reserve tries to control inflation in a narrow range. Too High, and it causes inflation. Too Low, and it drives up spending and that also causes inflation.