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Macro & Rates

Inflation, jobs, central banks, yields and the cycle behind the market.

• Basis point (bp)One hundredth of a percentage point: 0.01%.
• BondA loan to a government or company that pays interest and returns the principal at maturity.
• Central bankThe institution that manages a country's money supply and interest rates.
• CPI (Consumer Price Index)A monthly measure of how much prices have changed for a typical basket of consumer goods and services.
• DurationA measure of how sensitive a bond's price is to changes in interest rates.
• DXY (US Dollar Index)An index that tracks the US dollar against a basket of six major currencies.
• Federal funds rateThe interest rate banks charge each other for overnight loans, the Fed's main policy rate.
• FOMC (Federal Open Market Committee)The Federal Reserve committee that sets US interest rate policy.
• GDP (Gross Domestic Product)The total value of goods and services an economy produces.
• InflationA broad rise in prices over time, which reduces what money can buy.
• Inverted yield curveWhen short-term bond yields are higher than long-term yields.
• ISM Manufacturing PMIA monthly survey-based index of US factory activity.
• Jobless claimsA weekly count of people filing for unemployment benefits.
• Nonfarm payrolls (NFP)The monthly report of how many jobs the US economy added or lost.
• PCE price indexThe inflation measure the Federal Reserve uses for its 2% target.
• PPI (Producer Price Index)A measure of the prices producers receive for their goods and services.
• Quantitative easing and tighteningA central bank buying bonds to add money to the system (QE), or letting them run off to remove it (QT).
• RecessionA significant, widespread and lasting decline in economic activity.
• Risk-on / risk-offA description of whether investors are favoring riskier assets or safe ones.
• Sector rotationThe shift of money from one sector to another as the economic cycle changes.
• StagflationA combination of high inflation, weak growth and high unemployment.
• Treasury yieldThe return investors earn on US government debt.
• VIX (Volatility Index)A gauge of the S&P 500's expected volatility over the next 30 days, based on option prices.
• Yield curveA line showing bond yields across different maturities.
• Yield to maturity (YTM)The total return on a bond if it is held until it matures, given its current price.

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