— The Glossary
The glossary.
The terms the bond market uses to set the price of your mortgage, your savings, and your 401(k). Plain English, with the math shown.
The yield curve
A line on a chart that has called the last eight recessions. Understand what the slope is telling you.
Inflation
Why the same basket of groceries costs more every year, and what the Fed can actually do about it.
CPI
The headline number, decomposed. One-third of the basket is housing, which is why your rent is also Fed policy.
The Federal Reserve
The institution that sets the price of every dollar you borrow. Who they are, how they decide, why it matters.
Recession
Who gets to declare one, how long they usually last, and what the current data says.
GDP
The one number that tries to summarize the entire economy. Two-thirds of it is you buying things.
Bonds
A loan with a stamped coupon and a stamped maturity. The coupon never moves; the price does all the moving.
Treasury bills
A short loan to the U.S. Treasury, sold at a discount and paid back at face. The same trade gets quoted three different ways.
Interest rates
The Fed sets one number. Every other rate in your life is a spread on top of it, and the spread is what gets you.
Quantitative easing
The Fed buying bonds with money it just made. The reason your savings paid zero for a decade and the house got further away.
Monetary policy
Four tools, one mandate with two halves, and a 9-to-18-month lag between the Fed pulling a lever and you feeling it in your mortgage.
Bear market
Eleven of them since 1950, catalogued by depth, length, and recovery. Plus where the index actually is right now.
Bull market
Eleven runs since 1950, charted by gain and duration. Plus where the current one actually stands.
The S&P 500
Five hundred companies, weighted by size, the default scoreboard for U.S. stocks. Twenty-five years of returns and what $10,000 left alone actually does.
Market cap
Share price times shares outstanding. Six tiers from mega to nano, and the one multiplication that tells you which planet a company lives on.
Fiscal policy
Congress spends, the Treasury borrows, the bond market prices the bill. Twenty-five years of deficits and how the red ink shows up in your mortgage.
Hedge funds
A mutual fund with the guardrails removed and the bill sixty times larger. Who gets in, what they actually do, and why their leverage cycles show up in your 401(k).
Private equity
Buy the company with borrowed money, cut costs, raise prices, sell in five years. Eleven million Americans work at a PE-owned firm, often without knowing it.
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