---
ticker: "USRR10"
title: "U.S. 10-Year Model-Based Real Interest Rate"
unit: "%"
frequency: "Monthly"
source: "Fisher (1930); Gürkaynak, Sack, and Wright (2007)"
release: "Updated Monthly"
category: "Interest Rates"
country: "US"
language: "en"
canonical: "https://kred.dev/en/series/USRR10"
license: "https://creativecommons.org/licenses/by-nc-nd/4.0/"
latest_value: 2.20
latest_date: "2026-08-01"
first_date: "1996-01-01"
observations_total: 368
observations_shown: 120
---

# U.S. 10-Year Model-Based Real Interest Rate

## Overview

A long-horizon real rate obtained by subtracting model-based expected inflation from the 10-year nominal yield, not an observed inflation-linked yield.

## Key Figures

|  | Value | Date |
|---|---|---|
| Latest | 2.20 | 2026-08-01 |
| Change from previous | +0.12 | 2026-07-01 |
| Change over one year | +0.63 | 2025-08-01 |
| Highest on record | 3.55 | 1997-04-01 |
| Lowest on record | -0.41 | 2020-08-01 |
| Period covered | 1996-01-01 – 2026-08-01 |  |
| Observations | 368 |  |

## Recent observations

| Date | Value | Change |
|---|---|---|
| 2016-09-01 | 0.22 | -0.01 |
| 2016-10-01 | 0.29 | +0.07 |
| 2016-11-01 | 0.35 | +0.06 |
| 2016-12-01 | 0.70 | +0.35 |
| 2017-01-01 | 0.73 | +0.03 |
| 2017-02-01 | 0.77 | +0.05 |
| 2017-03-01 | 0.92 | +0.14 |
| 2017-04-01 | 0.77 | -0.15 |
| 2017-05-01 | 0.78 | +0.01 |
| 2017-06-01 | 0.74 | -0.04 |
| 2017-07-01 | 0.72 | -0.01 |
| 2017-08-01 | 0.67 | -0.05 |
| 2017-09-01 | 0.57 | -0.11 |
| 2017-10-01 | 0.73 | +0.16 |
| 2017-11-01 | 0.75 | +0.02 |
| 2017-12-01 | 0.57 | -0.18 |
| 2018-01-01 | 0.87 | +0.30 |
| 2018-02-01 | 1.09 | +0.21 |
| 2018-03-01 | 1.03 | -0.06 |
| 2018-04-01 | 1.01 | -0.02 |
| 2018-05-01 | 1.22 | +0.20 |
| 2018-06-01 | 1.25 | +0.03 |
| 2018-07-01 | 1.16 | -0.09 |
| 2018-08-01 | 1.26 | +0.10 |
| 2018-09-01 | 1.13 | -0.12 |
| 2018-10-01 | 1.30 | +0.17 |
| 2018-11-01 | 1.31 | +0.01 |
| 2018-12-01 | 1.25 | -0.05 |
| 2019-01-01 | 1.04 | -0.21 |
| 2019-02-01 | 1.07 | +0.03 |
| 2019-03-01 | 0.52 | -0.55 |
| 2019-04-01 | 0.42 | -0.10 |
| 2019-05-01 | 0.54 | +0.12 |
| 2019-06-01 | 0.42 | -0.12 |
| 2019-07-01 | 0.44 | +0.02 |
| 2019-08-01 | 0.42 | -0.02 |
| 2019-09-01 | 0.23 | -0.19 |
| 2019-10-01 | 0.37 | +0.13 |
| 2019-11-01 | 0.43 | +0.07 |
| 2019-12-01 | 0.51 | +0.08 |
| 2020-01-01 | 0.51 | -0.01 |
| 2020-02-01 | 0.32 | -0.19 |
| 2020-03-01 | -0.13 | -0.44 |
| 2020-04-01 | -0.11 | +0.02 |
| 2020-05-01 | -0.03 | +0.08 |
| 2020-06-01 | -0.15 | -0.13 |
| 2020-07-01 | -0.35 | -0.19 |
| 2020-08-01 | -0.41 | -0.06 |
| 2020-09-01 | -0.34 | +0.06 |
| 2020-10-01 | -0.29 | +0.05 |
| 2020-11-01 | -0.21 | +0.08 |
| 2020-12-01 | -0.23 | -0.02 |
| 2021-01-01 | -0.23 | 0.00 |
| 2021-02-01 | -0.23 | 0.00 |
| 2021-03-01 | 0.01 | +0.24 |
| 2021-04-01 | 0.12 | +0.11 |
| 2021-05-01 | 0.04 | -0.08 |
| 2021-06-01 | -0.01 | -0.04 |
| 2021-07-01 | 0.04 | +0.04 |
| 2021-08-01 | -0.26 | -0.30 |
| 2021-09-01 | -0.19 | +0.07 |
| 2021-10-01 | 0.09 | +0.28 |
| 2021-11-01 | 0.16 | +0.08 |
| 2021-12-01 | 0.09 | -0.07 |
| 2022-01-01 | 0.32 | +0.23 |
| 2022-02-01 | 0.44 | +0.12 |
| 2022-03-01 | 0.35 | -0.09 |
| 2022-04-01 | 0.95 | +0.60 |
| 2022-05-01 | 1.20 | +0.25 |
| 2022-06-01 | 1.03 | -0.18 |
| 2022-07-01 | 1.06 | +0.04 |
| 2022-08-01 | 0.86 | -0.21 |
| 2022-09-01 | 1.20 | +0.35 |
| 2022-10-01 | 1.80 | +0.59 |
| 2022-11-01 | 1.93 | +0.13 |
| 2022-12-01 | 1.58 | -0.35 |
| 2023-01-01 | 1.78 | +0.21 |
| 2023-02-01 | 1.42 | -0.36 |
| 2023-03-01 | 2.06 | +0.64 |
| 2023-04-01 | 1.44 | -0.62 |
| 2023-05-01 | 1.54 | +0.09 |
| 2023-06-01 | 1.06 | -0.48 |
| 2023-07-01 | 1.43 | +0.37 |
| 2023-08-01 | 1.60 | +0.18 |
| 2023-09-01 | 1.70 | +0.10 |
| 2023-10-01 | 2.08 | +0.38 |
| 2023-11-01 | 2.09 | +0.01 |
| 2023-12-01 | 1.68 | -0.41 |
| 2024-01-01 | 1.68 | 0.00 |
| 2024-02-01 | 1.62 | -0.06 |
| 2024-03-01 | 1.93 | +0.31 |
| 2024-04-01 | 1.94 | +0.01 |
| 2024-05-01 | 2.10 | +0.17 |
| 2024-06-01 | 2.00 | -0.10 |
| 2024-07-01 | 2.05 | +0.05 |
| 2024-08-01 | 1.66 | -0.38 |
| 2024-09-01 | 1.58 | -0.08 |
| 2024-10-01 | 1.48 | -0.10 |
| 2024-11-01 | 1.96 | +0.48 |
| 2024-12-01 | 1.82 | -0.13 |
| 2025-01-01 | 2.06 | +0.23 |
| 2025-02-01 | 2.03 | -0.03 |
| 2025-03-01 | 1.86 | -0.17 |
| 2025-04-01 | 1.67 | -0.19 |
| 2025-05-01 | 1.67 | 0.00 |
| 2025-06-01 | 1.87 | +0.20 |
| 2025-07-01 | 1.66 | -0.21 |
| 2025-08-01 | 1.57 | -0.09 |
| 2025-09-01 | 1.57 | 0.00 |
| 2025-10-01 | 1.55 | -0.01 |
| 2025-11-01 | 1.61 | +0.05 |
| 2025-12-01 | 1.46 | -0.15 |
| 2026-01-01 | 1.67 | +0.21 |
| 2026-02-01 | 1.75 | +0.08 |
| 2026-03-01 | 1.47 | -0.27 |
| 2026-04-01 | 1.59 | +0.12 |
| 2026-05-01 | 1.63 | +0.03 |
| 2026-06-01 | 1.92 | +0.29 |
| 2026-07-01 | 2.07 | +0.16 |
| 2026-08-01 | 2.20 | +0.12 |

## Definition

USRR10 is the published ten-year real interest rate recorded as-is without any transformation, expressed in percent per annum as the ten-year nominal rate less a model estimate of expected inflation at the same horizon. The value is a model-based estimate rather than a yield observed on an inflation-linked security, so KRED does not present it as an observed yield and carries the recorded model output through unchanged.

Its conceptual basis is the theory of interest that decomposes a nominal rate into a real reward and anticipated price change, a decomposition in which the real rate is the price equating present and future income (Fisher 1930).

The nominal component is a ten-year government bond yield, whose yield-to-maturity concept is the single discount rate equating a bond's price to the present value of its remaining cash flows (Macaulay 1938) and which the term structure decomposes into expected future short rates plus a premium (Hicks 1939). The yield at this maturity point corresponds to the discount function recovered from coupon-bond prices, to parsimonious parametric forms and their extension, and to daily zero-coupon and par-yield construction (McCulloch 1971; Nelson and Siegel 1987; Svensson 1994; Gürkaynak, Sack, and Wright 2007).

The price component is expected inflation, whose referent is a price index defined by fixed-basket weighted aggregation and the utility-constant cost-of-living concept (Laspeyres 1871; Konüs 1939; Diewert 1998). The inflation that enters a real-rate calculation is understood as the long-run path net of supply shocks and as a permanent trend component (Eckstein 1981; Stock and Watson 2007), and the same logic of deflating a nominal magnitude by prices to obtain a real one governs real external price concepts (Rogoff 1996).

## Methodology

KRED applies no transformation to USRR10 and stores the real rate exactly as recorded, neither rescaling, deflating, smoothing, nor annualizing it, and it does not re-estimate the expected-inflation model. The methodology is therefore confined to the measurement basis by which such a model-based real rate comes to exist.

The construction is the interest-rate decomposition that subtracts anticipated price change from a nominal rate (Fisher 1930), whose nominal side is a ten-year yield quoted under the yield-to-maturity convention (Macaulay 1938). The yield at that maturity point is produced from a discount function recovered from coupon-bond prices by cubic or exponential splines, from parsimonious or extended parametric forms, and from the now-standard daily curve construction, and those methods have been compared against one another (McCulloch 1971, 1975; Vasicek and Fong 1982; Nelson and Siegel 1987; Svensson 1994; Gürkaynak, Sack, and Wright 2007; Bliss 1997).

The expected inflation that is subtracted is a model estimate rather than an observed price, and the price measurement it refers to is fixed by base-weighted and current-weighted index formulas, by the ideal index defined as their geometric mean, by the expenditure-share-weighted log-change index, and by the theory of superlative indices exact for flexible aggregators (Laspeyres 1871; Paasche 1874; Fisher 1922; Törnqvist 1936; Diewert 1976). The inflation concept being estimated is defined by the decomposition of measured inflation into trend and transitory noise and is operationalized as a permanent component with stochastic volatility (Cecchetti 1997; Stock and Watson 2007).

None of that construction is applied to USRR10 itself, and KRED keeps the published real-rate level exactly as recorded.

## Applications in Economics

A long-horizon real rate is the price that governs the intertemporal allocation of saving and investment, and removing anticipated price change from the nominal rate is what makes it the real reward to lending and borrowing (Fisher 1930). Policy implementation takes the shortest maturity rate as its operating target (Bindseil 2004; Borio 1997), yet the stance reaches real activity through the term structure and therefore through the long real rate, so the decomposition of long yields into expectations and a premium is the starting point of any reading (Hicks 1939).

Interpretation depends on which inflation concept was subtracted. The gap between the cost-of-living target and a fixed-basket formula, together with the substitution and quality-change measurement biases, moves the real-rate level up or down (Konüs 1939; Diewert 1998; Boskin et al. 1996), while the notion of inflation as a long-run path net of supply shocks and the trend-versus-transitory decomposition determine which inflation belongs in the subtraction (Eckstein 1981; Cecchetti 1997; Stock and Watson 2007).

In the external sector the series serves as the foreign component of a real-interest differential, a use whose background is the tradition of defining the real exchange rate by deflating the nominal rate with prices and of measuring the half-life of its deviations (Rogoff 1996), governed by the absolute and relative forms of purchasing-power parity and by the structural-differential distinction (Cassel 1918; Officer 1976; Frenkel 1978; Dornbusch 1987). The fundamentals-conditional real effective exchange-rate fair value and deviation that KRED publishes take this series as that foreign real-rate input.

## Applications in Financial Markets

Because a long real rate is the discount rate for assets generating real cash flows, a move in this level enters valuation distinctly from a move in nominal discount rates, a distinction grounded in the decomposition of a nominal rate into a real reward and anticipated price change (Fisher 1930).

In bond portfolios the value is the benchmark for judging the inflation-adjusted holding return on nominal bonds, whose rate exposure is managed through the duration that maps yield to the timing of cash flows and through immunization based on the full term structure (Macaulay 1938; Fisher and Weil 1971). The zero-coupon and forward curves used to discount and hedge come from spline recovery, parametric fitting, and daily curve building, and those methods have been compared (McCulloch 1971, 1975; Vasicek and Fong 1982; Nelson and Siegel 1987; Svensson 1994; Gürkaynak, Sack, and Wright 2007; Bliss 1997).

Since the level nets out a model estimate of expected inflation, its uncertainty inherits the uncertainty of inflation measurement and trend extraction (Cecchetti 1997; Stock and Watson 2007; Diewert 1998), and in cross-currency comparisons it is best read alongside the slow mean reversion of real rates and real exchange rates (Rogoff 1996).

## Statistical Tests

This is a model-derived series, the output of a Fisher decomposition that subtracts a model estimate of expected inflation from a ten-year nominal yield, so the unit-root reading describes the model-based estimate rather than a directly observed price, and the serial-correlation and break diagnostics run on the first difference. Because the underlying model can be re-estimated, its history is revisable, and no store of vintages exists from which that revision could be quantified. The series is tested over its own span from 1996-01-01 to 2026-06-01, comprising 366 monthly observations fit with a constant and trend.

The ten-year model-based real rate is integrated of order one on the level, with the Dickey and Fuller (1979) test in the lag-augmented form of Said and Dickey (1984), its lag length chosen by an information criterion, not rejecting a unit root at p = 0.6871, the nonparametric Phillips and Perron (1988) test concurring at p = 0.6492, and the Kwiatkowski et al. (1992) test rejecting trend stationarity at p < 0.01, an honest agreement of all three that carries the I(1) verdict. The GLS-detrended escalation of Elliott, Rothenberg, and Stock (1996) serves only to confirm the augmented Dickey-Fuller leg on ambiguous verdicts and the Ng and Perron (2001) escalation applies only under flagged near-unit moving-average risk, so neither is required on this clean agreement. On the first difference the Ljung and Box (1978) portmanteau, refining the Box and Pierce (1970) form, fails to reject the white-noise null at lags 12 and 24, Q = 13.66 and Q = 28.23 at p = 0.323 and p = 0.250, so the monthly changes are not distinguishable from white noise. The Bai and Perron (1998, 2003) procedure finds no break in the mean of the differenced series, a reading consistent with the parameter-instability inference of Andrews (1993) on the differenced object (Perron 1989).

This is a monthly model output with no posited low-integer seasonal component, so the seasonal machinery of Hylleberg et al. (1990) and Canova and Hansen (1995) carries no meaningful object and is not run (Beaulieu and Miron 1992; Ghysels and Osborn 2001).

## Frequently Asked Questions

### What are the secured overnight financing rate and the reserve balance rate?

The secured overnight financing rate, the administered rate on reserve balances, and the ten-year real rate, all carried as published.

### How does SOFR differ from the rate paid on reserve balances?

One is a transacted rate at which the market funds itself against collateral; the other is administered by the central bank. The distance between them reads directly on the scarcity of reserves.

### How is the US ten-year real interest rate obtained?

It is the real yield observed in the inflation-indexed Treasury market, so the long-horizon cost of funds can be read in purchasing power terms without assuming an inflation expectation separately.