The KC Fed Model-Based Natural Rate of Interest (r*) and Model-Based Natural Unemployment Rate (u*) are calculated in two steps. The first step estimates a time-varying parameter vector autoregression on monthly series for core personal consumption expenditure inflation, the unemployment rate, and the real federal funds rate. The second step forecasts the real federal funds rate and unemployment rate 60 months forward to generate the current month’s estimate of r* and u*. The Economic Bulletin “Introducing New Monthly Estimates of the Natural Rate of Interest and Natural Unemployment Rate” introduces the KC Fed Model-Based r* and provides more details. Included below are a downloadable CSV and plots of the KC Fed Model-Based r* and u* series.
The KC Fed Model-Based r* and u* are calculated through an automated procedure using public data and do not reflect the views of the Federal Reserve Bank of Kansas City, its staff, or the Federal Reserve System.
External LinkDownload a CSV file of the data.
Kansas City Fed Model-Based Natural Rate of Interest (r*): Full History
Kansas City Fed Model-Based Natural Unemployment Rate (u*): Full History
When using the data, please give attribution with the following reference:
- Glover, Andrew, and Johnson Oliyide. 2026. "Introducing New Monthly Estimates of the Natural Rate of Interest and Natural Unemployment Rate."
Federal Reserve Bank of Kansas City, Economic Bulletin, February 2.
The views expressed are those of the authors and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.