Natural rate is rising in US and eurozone, BIS study finds

Research adds to debate on metric but warns it is “blurry guidepost” for monetary policy

The Bank for International Settlements, Basel
The Bank for International Settlements, Basel
Photo: Ulrich Roth

The natural rate of interest has started to climb in the US and eurozone after decades of decline, research by the Bank for International Settlements (BIS) finds.

Economists have long been struggling to understand why the natural rate, a key guide for monetary policy-makers, has trended downwards in advanced economies for at least the past three decades. 

However, as the BIS notes in a quarterly bulletin article published on March 4, policy rates have risen in recent years. Long-term bond yields

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