Macro: what moves US markets: glossary

Room 02
37 terms

The terms

2-year Treasury yieldThe two-year Treasury yield is the bond market's bet on where the Fed will hold rates over the next two years, so it moves hardest on Fed nights and…
10-year Treasury yieldThe ten-year Treasury yield is the benchmark long rate that mortgages, company debt and stock valuations are priced off. The Fed does not set it…
Average hourly earningsAverage hourly earnings is the wage growth number in the US jobs report. Wages are the bridge from jobs to prices: fast pay growth keeps services…
Breakeven inflationBreakeven inflation is the gap between an ordinary Treasury yield and its inflation-protected twin of the same maturity, the inflation rate the bond…
CME FedWatchCME FedWatch turns futures on the overnight rate into a probability for each outcome at every Fed meeting. It is what the market priced before the…
Core CPICore CPI is CPI with food and energy removed, the volatile parts that interest rates cannot fix. The market often trades core over headline because…
CPICPI, the consumer price index, is the monthly US measure of what a basket of goods and services costs households, published by the BLS. It lands at…
Debt ceilingThe debt ceiling is the cap Congress sets on total US government borrowing. The Treasury borrows the gap between spending and taxes, so it hits the…
Dollar index (DXY)The dollar index, DXY, measures the dollar against six major currencies, with the euro about 58% of it. A stronger dollar weighs on gold, oil and US…
Dot plotThe dot plot is the chart of where each Fed official expects the policy rate to be over the next few years, one dot each, published four times a…
Dual mandateThe dual mandate is the Fed's job as Congress wrote it: stable prices and maximum employment. The 2% inflation target is the Fed's own reading of…
Economic calendarAn economic calendar lists every scheduled release of the week with its time and consensus forecast. Set one to IST once and check it every Sunday…
Fed funds rateThe fed funds rate is the target range for overnight lending between US banks, the one rate the Fed sets directly. It anchors the short end of the…
Federal ReserveThe Federal Reserve is the US central bank, built in 1913 after the 1907 bank runs were stopped by one banker. It sets the price of money, and its…
FOMCThe FOMC is the Federal Open Market Committee, the twelve voters inside the Fed who set the policy rate at eight scheduled meetings a year. The…
FOMC minutesThe FOMC minutes are the written record of a Fed meeting, released three weeks after the decision at 11:30 PM IST, 12:30 AM in winter. They show the…
FREDFRED is the free St Louis Fed database of every major US economic series going back decades, charts and downloads with no account. When a headline…
GDPGDP is the total value of goods and services an economy produces. The BEA publishes US GDP quarterly, first as an advance estimate and then two…
Government shutdownA US government shutdown happens when Congress has not passed spending by the fiscal year start on 1 October, so non-essential agencies close. The…
Initial jobless claimsInitial jobless claims is the weekly count of Americans filing for unemployment benefit, released every Thursday at 6:00 PM IST, 7:00 PM in winter.…
Inverted yield curveAn inverted yield curve is when short-term Treasuries yield more than long-term ones, usually the two-year above the ten-year. It means the market…
ISM PMIThe ISM PMI is a monthly survey of US purchasing managers; above 50 means activity is expanding, below 50 contracting. Manufacturing lands on the…
JOLTSJOLTS is the BLS survey of job openings and labour turnover. Openings against unemployed workers is the Fed's read on how tight hiring is, and quits…
Nonfarm payrollsNonfarm payrolls is the BLS count of jobs added in the US last month, released at 6:00 PM IST, 7:00 PM in winter, usually on the first Friday. It is…
PCEPCE, the personal consumption expenditures price index, is the inflation measure the Fed targets at 2%, published by the BEA. It prices the basket a…
PPIPPI, the producer price index, measures the prices businesses receive, which makes it inflation upstream of the shop shelf. It lands from the BLS in…
Quantitative easingQuantitative easing is the Fed buying Treasuries and mortgage bonds with new reserves to push long-term yields down when the policy rate is already…
Quantitative tighteningQuantitative tightening is the Fed shrinking its balance sheet by letting bonds mature without replacing them, draining reserves from banks. Rate…
Real yieldA real yield is a bond's return after inflation, read live from inflation-protected Treasuries, called TIPS. It is the first driver of gold: gold…
Retail salesRetail sales is the Census Bureau's monthly count of what US shops and online stores sold. Consumer spending is about two thirds of the economy, so…
TariffA tariff is a tax on imports. In the US the president can set many of them alone, effective the moment they are announced, which is why one post can…
Term premiumThe term premium is the extra yield investors demand to lend for ten years instead of rolling short bills, for the risk that rates or inflation…
Treasury yieldA Treasury yield is the annual return on a US government bond at today's market price; when the price falls, the yield rises. Treasuries trade over…
Unemployment rateThe unemployment rate is the share of the US labour force that wants work and has none, from the same BLS release as payrolls. A rising rate pulls…
US TreasuryThe US Treasury is the government's borrower and the oldest name on the US market map: it issues bonds to cover the gap between what Congress spends…
USD/INRUSD/INR is the price of one dollar in rupees. Every dollar-priced asset you hold is also a bet on it, chosen or not: the dollar moved, so the rupee…
Yield curveThe yield curve is the line of Treasury yields from three months to thirty years, normally sloping up because longer loans pay more. The short end…