Reference

The macro glossary.

Plain-English definitions of the terms this briefing uses every day. No jargon fog, no textbook padding.

Basis point: One hundredth of a percentage point. A 25-basis-point hike takes rates from 4.00% to 4.25% — the standard unit of central-bank moves.
Breakeven inflation: The inflation rate bond markets expect, read off the gap between nominal Treasury yields and TIPS yields of the same maturity.
Carry trade: Borrowing in a low-rate currency to buy higher-yielding assets. Profitable while calm, violent when it unwinds — see every yen-carry scare.
Core PCE: The Fed's preferred inflation gauge: personal consumption expenditures excluding food and energy. The 2% target is measured here, not in CPI.
Dot plot: The FOMC's anonymous chart of where each official expects rates to be in coming years. Markets trade the dots, then re-trade them when officials talk.
Drawdown: The peak-to-trough fall in an asset or portfolio, usually quoted as a percentage. Risk management starts with deciding how much drawdown you can survive.
DXY: The dollar index: the dollar's value against a basket of six major currencies. A rising DXY tightens financial conditions worldwide.
FOMC: The Federal Open Market Committee — the Fed body that sets US interest rates, meeting eight times a year.
Inverted curve: When short-term yields exceed long-term yields. Historically the most reliable recession warning in fixed income, though the timing is never clean.
Liquidity: How easily assets convert to cash without moving the price. Abundant liquidity lifts everything; its withdrawal is what turns selloffs into cascades.
Neutral rate (r*): The theoretical interest rate that neither stimulates nor restrains the economy. The Fed's estimate of it anchors every debate about whether policy is tight or loose.
OPEC+: The oil cartel plus allies including Russia. Its production decisions set the floor and ceiling for crude — and through energy, much of headline inflation.
Quantitative tightening: The Fed shrinking its balance sheet by letting bonds roll off — tightening financial conditions without touching the policy rate.
Real yields: Bond yields minus expected inflation. Rising real yields raise the hurdle for every risky asset, from stocks to Bitcoin.
Risk-on / risk-off: Market shorthand for appetite: risk-on favors equities, crypto, and credit; risk-off favors Treasuries, gold, and the dollar.
Term premium: The extra yield investors demand for holding long bonds instead of rolling short ones. When it rises, long yields climb even if the Fed does nothing.
VIX: The market's 30-day expected volatility for the S&P 500, derived from option prices. Low VIX means complacency is cheap; spikes mean hedging is expensive.
0DTE options: Options expiring the same day they trade. Their gamma flows can pin or whip the S&P 500 intraday — weather, not climate, but loud weather.

The macro glossary.

Three briefings a day, in your inbox.