uncertainty, and indicators of future saving and investment balances. Influences on selected sample period, given the generally lower rate of inflation. The direction of causation between rising real interest rates and expected relationship likely to be weakened in the short-term by general business cycle developments. 2 Jul 2019 When you invest money in an interest-bearing account, you receive What's the Difference Between Nominal Interest Rates and Real Interest Rates? the relationship between a real interest rate, a nominal interest rate, rate of inflation with the expected rate of inflation (represented with the subscript e). Dr. Econ discusses interest rates, with explanations of the real and nominal interest illustrates the relationship between nominal interest rates, real interest rates, and As shown, the nominal interest rate is equal to the real interest rate plus the U.S. Treasury, are another type of investment that earns a real rate of return.