From this week's notes
- 5Y5Y forward
- The average inflation rate expected for the period from five years from now to ten years from now.
- Seen in Breakeven Inflation
- AAA
- The highest credit rating, meaning the borrower is seen as very unlikely to fail to repay.
- Seen in Spread Atlas
- Annualised
- Scaled up to show what the daily movement would look like over a full year.
- Seen in Volatility
- Basis point
- One hundredth of one percentage point, so 25 basis points equals a quarter of a percent.
- Seen in All Banks
- Basis point (bp)
- One hundredth of one percentage point, so 45 bps equals 0.45 percentage points.
- Seen in Curve Compare
- Basis point (bps)
- One hundredth of a percentage point, so 25 bps is a 0.25 percent change.
- Seen in Policy Summary
- Basket
- A mix of several currencies combined into one number to show the dollar's overall strength.
- Seen in FX Dashboard
- benchmark
- A standard reference price that other prices are compared against.
- Seen in Commodity Dashboard
- Bond yield
- The return a lender earns from holding a government bond, which moves opposite to its price.
- Seen in Econ Map
- Breakeven inflation
- The gap between a regular bond's yield and an inflation-protected bond's yield, showing the inflation rate investors expect.
- Seen in Breakeven Inflation
- Broad dollar
- A measure of the US dollar's value against a large basket of other currencies.
- Seen in Macro Drivers
- Carry
- The income you earn from holding an investment, minus the cost of paying for it.
- Seen in Mini-Apps
- Carry trade
- Borrowing in a low-interest currency to invest in a higher-interest one, to earn the difference.
- Seen in Yen Carry
- Convexity
- A measure of how the price-rate link curves, which affects how the duration estimate changes for bigger rate moves.
- Seen in Mini-Apps
- Correlation
- A number from -1 to 1 showing how closely two measures tend to move together.
- Seen in Macro Drivers
- Debt held by the public
- The part of government debt that is owned by investors, banks, funds and foreign buyers.
- Seen in US Debt
- Duration
- A measure of how much a bond's price tends to move when interest rates change, given in years.
- Seen in Mini-Apps
- EFFR
- The effective federal funds rate, the average rate banks charge each other for overnight loans of their reserve cash.
- Seen in Fed
- Mortgage-backed securities
- Bonds backed by pools of home loans that pay investors monthly.
- Seen in Liquidity Radar
- Net liquidity
- The cash the Fed has effectively made available to banks and markets, after taking out money held by the government and some short-term deposits.
- Seen in Fed Net Liquidity
- Official cash rate
- The interest rate the central bank sets for overnight lending between banks, which other borrowing rates build on.
- Seen in RBNZ
- Policy rate
- The main interest rate a central bank sets, which guides rates banks charge.
- Seen in Policy Summary
- Real rate
- The interest rate minus inflation, showing what a rate is worth after prices rise.
- Seen in Policy Summary
- Real yield
- The interest rate on a government bond after subtracting expected inflation.
- Seen in Macro Drivers
- SOFR
- The secured overnight financing rate, the cost of borrowing cash overnight using Treasury bonds as collateral.
- Seen in Fed
- SOMA
- The System Open Market Account, the Fed's portfolio of securities it holds.
- Seen in Liquidity Radar
- Spot price
- The price for buying or selling something right now, for immediate delivery.
- Seen in Cross-Asset Map
- Term premium
- The extra return investors ask for to lend money for a longer time instead of a shorter one.
- Seen in Term Premium
- TGA
- The U.S. Treasury's checking account at the Fed, where money from taxes and borrowing is held.
- Seen in Fed Net Liquidity
- Total debt
- The full amount the government owes, including money it borrowed from itself, such as trust funds.
- Seen in US Debt
- Treasury General Account
- The government's checking account at the Fed, where tax and spending cash sits.
- Seen in Liquidity Radar
- Variable rate
- An interest rate on a loan that can change when the central bank changes its rate.
- Seen in RBA
- Yield gap
- The difference between the interest rates paid by two countries' government bonds.
- Seen in Yen Carry
Written by AI. Not advice.