Macro: what moves US markets: glossary

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…