The short-term interest rate a central bank sets
The overnight rate a central bank targets to steer inflation and demand; shown for context because it explains the yield curve and the credit cycle rather than predicting them.
Every central bank here steers one short rate: the federal funds rate, the ECB's deposit facility rate, Bank Rate, the call rate, the repo rate, and in China the one-year loan prime rate, a lending benchmark the People's Bank steers through its reverse repo operations. Raising it slows borrowing and spending with a lag of a year or more; John Taylor's 1993 rule describes how the rate has typically responded to inflation and the output gap. The direction of change over three months is labelled tightening, easing or on hold.
The policy rate carries no threshold on worldstat.us. Its level is a cause of what the indicators measure, not a symptom: a high rate that stays high is how a yield curve inverts and how credit growth turns negative. It is shown so that the reader can see whether the indicators are turning while policy is still restrictive, which is when downturns have historically followed.
On this site
- Loan prime rate, 1-year China 3.00 % Context
- Real policy rate China +2.00 % Context
- ECB deposit facility rate Eurozone 2.50 % Context
- Real policy rate Eurozone 0.00 % Triggered
- 10y yield minus repo rate India +1.81 pp Normal
- Real policy rate India +0.29 % Context
- Policy repo rate India 5.50 % Context
- Overnight call rate Japan 1.04 % Context
- Real policy rate Japan −1.66 % Normal
- Bank Rate United Kingdom 3.75 % Context
- 10y gilt minus Bank Rate United Kingdom +1.56 pp Normal
- Real policy rate United Kingdom +0.95 % Watch
- Fed funds target, upper bound United States 4.00 % Context
- Real policy rate United States +1.43 % Triggered
Related terms
Bank Rate · ECB · call rate · credit impulse · deposit facility rate · fed funds · repo rate · threshold · yield curve