The Fed’s probably going to hold rates steady for longer than expected. But even when that awaited rate cut comes, it may not be all that cathartic

Federal Reserve Chair Jerome Powell isn’t going to cut rates just because you want him to.

Seems obvious, but it bears repeating. The federal funds rate currently stands at a 23-year high, between 5.25% and 5.5%. And, as a reporter, I feel like I’ve been on rate-cut-watch for a…long time. But, coming into 2024, there was a lot of optimism (rightfully so) that rate cuts were imminent, with the Fed telegraphing that three were on the horizon for the year.

No cuts have materialized, more than four months into 2024. Earlier this week at a Washington event, Powell said that inflation’s proving sticky and that “recent data have clearly not given us greater confidence.” I don’t know about you, but that’s not sounding to me like there’s going to be a rate cut in a couple weeks.

Fed discourse can get tense. As I’ve been thinking about why, I realized this: I was only 16 when the Fed began quantitative easing and slashing rates to historic lows. I’m now 31, and there are all sorts of private markets investors right now who are my age or a little bit older, who grew up with roughly the same frame of reference—a low-rate environment is pretty much all we’ve ever known. Are millennials like me actually thinking through the likelihood that, even when rate cuts come, they won’t go back to what we grew up most familiar with?

“I definitely think there’s denial right now—if you haven’t lived through an elevated rate environment, then you might not even view that it’s possible to be in an elevated rate environment for an extended period of time,” said Ajay Bijoor, Baird’s head of capital structure advisory.

Just because you know something in theory, doesn’t mean you know it in practice. So, my question became: What does history say about all this? As it turns out, conversations around interest rates have always been tense.

Don’t believe me? Consider this: Interest and interest rates date back to ancient Babylon—where they were engraved into a pillar more than seven feet high (literally and metaphorically set in stone) in Hammurabi’s Code. Most famous for the memorable and terrifying “eye for an eye” edict, Hammurabi’s Code actually focuses heavily on finance, especially interest rates, spelling out for example that “the maximum rate of interest for silver loans was set at 20 per cent and for barley at 33.33 per cent,” reads Edward Chancellor’s The Price of Time: The Real Story of Interest.

But history can be a guide in other ways, because the reality is this: If you take the long view, rates aren’t actually that high right now. In the context of my lifespan, sure, but in 1980, the federal funds rate hit a staggering 20%. The decade low would ultimately be 6%––a low still higher than the federal funds rate is today.

So, the interest rate environment of the last two decades feels normal to me, but historically just isn’t. That said, a 23-year high is still a 23-year high, and it does create less leeway in the private markets, especially for private equity firms: “As we look at new transactions, the cost of debt has an impact on our ability to take on leverage,” said Will Manuel, American Securities managing director.

VCs aren’t out of the interest rate crosshairs either, as rates affect fundraising prospects and LPs’ expectations while pressuring portfolio companies.

And, to be completely clear, I’m not saying that the Fed cutting rates wouldn’t be a big deal. It would, and will. Since the Fed began raising rates in March 2022, these hikes have caused consternation in some parts of the economy, going as far as to create desperation in others. But, for now, at least there’s stability.

“People can plan around the current rates and then, if rates come down, that's a little bit of a bonus,” said Thomas Smale, FE International CEO and founder.

What I am saying is this: It’s hard to fully conceptualize living through history, level-setting what’s normal in the grand scheme of things. And we’re at the tail end of a historic experiment in divergent monetary policy. So while a zero-rate environment felt oddly normal to me, it’s now gone—and it’s not coming back.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com