The policy rate minus core inflation
The policy rate less core inflation over the past year: how hard monetary policy is braking. It triggers when it is a point above its ten-year mean and the central bank is still raising.
A policy rate means little on its own. Four percent is tight when core prices rise one percent a year and loose when they rise seven. Subtracting core inflation gives the real rate, the return a saver actually earns and the cost a borrower actually pays, which is what slows spending. Economists compare it with a neutral rate that nobody observes; worldstat.us compares it with its own ten-year mean instead, so every region has a baseline that fits its history and nothing is estimated.
The rule has two parts. The level: the real rate is more than one point above its ten-year mean. The impulse: the policy rate is higher than it was six months earlier. Both must hold to trigger. A high real rate on its own, as in 2024 when inflation fell while rates were held, puts the series on Watch; a central bank that is still raising into a real rate already above its norm is applying the brake, and that is the condition that has preceded most recessions in the sample. The construction follows a reviewer's suggestion, September 2026, and is a worldstat.us rule with no published track record of its own.
Core inflation is used for every region that publishes it; India uses the headline rate. China has no series because no official policy rate is published in a machine-readable form.
core CPI · policy rate · recession