Real Rate Differentials — Inflation-Adjusted 9x9 Matrix
Policy rate minus headline CPI, side by side across all nine central banks
Data generated May 29, 2026
What real rates show
Nominal rate differentials only tell half the story. A 4% policy rate against 5% inflation is meaningfully looser than a 1% rate against zero inflation, even though the nominal level is far higher. The real rate — nominal policy rate minus headline year-over-year CPI — captures restrictiveness directly, and the cross-bank real-rate matrix shows where stance asymmetry is largest.
How to read the matrix
Each cell is row real rate minus column real rate. Two banks at similar nominal levels can sit on opposite sides of zero in real terms, which is precisely the type of asymmetry that drives sustained currency trends.
Interpretation
Use this matrix to spot:
- Pairs where nominal differentials understate the underlying carry — a bank with low inflation and a moderate nominal rate may have a meaningfully positive real rate vs a peer with high inflation and a higher nominal rate
- Restrictive standouts — large positive real-rate spreads vs the cross-bank median signal one of the tightest stances in the world
- Accommodative standouts — large negative spreads, often associated with weakening currencies and rising domestic asset prices
Methodology
Inflation inputs use each central bank’s headline CPI year-over-year as published in our model dataset. Real rate equals nominal policy rate minus this CPI value. We deliberately do not subtract core inflation or expected inflation — headline CPI is the benchmark most widely cited in cross-bank policy commentary. See the methodology page for the full data lineage.
Real rate differential matrix
| USD | EUR | GBP | AUD | CAD | JPY | INR | CHF | CNY | |
|---|---|---|---|---|---|---|---|---|---|
| USD | +0.00 | +1.88 | +0.42 | +0.12 | -1.48 | +2.62 | +1.02 | +2.52 | -0.03 |
| EUR | -1.88 | +0.00 | -1.45 | -1.75 | -3.35 | +0.75 | -0.85 | +0.65 | -1.90 |
| GBP | -0.42 | +1.45 | +0.00 | -0.30 | -1.90 | +2.20 | +0.60 | +2.10 | -0.45 |
| AUD | -0.12 | +1.75 | +0.30 | +0.00 | -1.60 | +2.50 | +0.90 | +2.40 | -0.15 |
| CAD | +1.48 | +3.35 | +1.90 | +1.60 | +0.00 | +4.10 | +2.50 | +4.00 | +1.45 |
| JPY | -2.62 | -0.75 | -2.20 | -2.50 | -4.10 | +0.00 | -1.60 | -0.10 | -2.65 |
| INR | -1.02 | +0.85 | -0.60 | -0.90 | -2.50 | +1.60 | +0.00 | +1.50 | -1.05 |
| CHF | -2.52 | -0.65 | -2.10 | -2.40 | -4.00 | +0.10 | -1.50 | +0.00 | -2.55 |
| CNY | +0.03 | +1.90 | +0.45 | +0.15 | -1.45 | +2.65 | +1.05 | +2.55 | +0.00 |
Real rate by bank
| Bank | Currency | Policy rate | Headline CPI | Real rate |
|---|---|---|---|---|
| Bank of Canada | CAD | 5.25% | 2.00% | +3.25% |
| Bank of England | GBP | 3.75% | 2.40% | +1.35% |
| Bank of Japan | JPY | 0.75% | 1.60% | -0.85% |
| European Central Bank | EUR | 2.00% | 2.10% | -0.10% |
| Federal Reserve | USD | 4.38% | 2.60% | +1.77% |
| People's Bank of China | CNY | 3.00% | 1.20% | +1.80% |
| Reserve Bank of Australia | AUD | 4.35% | 2.70% | +1.65% |
| Reserve Bank of India | INR | 5.25% | 4.50% | +0.75% |
| Swiss National Bank | CHF | 0.25% | 1.00% | -0.75% |