This is necessarily the same as the rate of interest which would be determined by supply and demand if no use were made of money and all lending were effected in the form of capital goods”. 6 The “U6 measure” captures unemployment, underemployment (i.e.
In response to these inflation pressures, combined with the prospect of normalisation of monetary policy in the US, the MPC embarked on a tightening interest rate cycle in January, but stressed that the cycle would be moderate given the weak growth outlook. The MPC is sensitive to the fact that it risks being pro-cyclical, and it could undermine growth at the margin.