Neutral interest rate – much ado about nothing
In a study published today, the ECB places the nominal neutral interest rate at around 2% – although the individual models fluctuate significantly around this value.
Commerzbank Economic Research
02/07/2025
The ECB puts the neutral interest rate at just under 2%
The ECB presented its latest estimates on the neutral interest rate today. However, there has not been much change compared to the last analysis a year ago . Based on the median of all model estimates, the current estimate is marginally lower. More concretely, the models would now suggest a slightly negative real neutral interest rate (chart 1). In nominal terms, this would correspond to just under 2%. The analysts surveyed as part of the ECB Survey of Monetary Analysts and by Consensus Economics now see the real neutral interest rate slightly in positive territory, i.e. slightly above 2% in nominal terms. At the same time, the ECB naturally points out the high level of uncertainty surrounding the estimates.
For full text see attached PDF-Version.
