Monetary conditions index

A Monetary Conditions Index (MCI) is like a report card for the economy. It tells us how healthy the economy is today and helps us understand what kind of things can influence it in the future. The MCI measures two things - the cost of borrowing money (called interest rates) and the amount of money that people have to spend (called the money supply). When both of these are good - meaning interest rates are low and people have a lot of money to spend - that's good for the economy, and the MCI is high. When either of these is bad - interest rates are high and people don't have enough money - then that's not good for the economy and the MCI is low. By keeping an eye on the MCI, we can better understand how changes in interest rates or the money supply can affect our economy.