Introducing New Monthly Estimates of the Natural Rate of Interest and Natural Unemployment Rate

Andrew Glover and Johnson Oliyide

Economic Bulletin, 2026, 3

Abstract: Policymakers reference the natural rate of interest (r*) to judge the tightness of monetary policy and the natural unemployment rate (u*) to gauge whether the economy is near full employment. Most estimates of these measures use quarterly data and are only updated four times per year. We introduce new monthly measures of r* and u*—the KC Fed Model-Based Natural Rate of Interest and Natural Unemployment Rate—to provide more timely data on the tightness of labor markets and stance of monetary policy.

Date: 2026
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