Bloomberg Concepts

Central Bankers and Interest Rates - answer--most central banks have a mandate to prevent runaway inflation and deflation -as inflation is corrosive to bonds, fixed investors watch hawkishly for any signs of inflation -central banks closely monitor inflation expectations and the output gap when making rate decisions -central banks contain inflation and deflation by directly changing interest rates or by altering interest rate expectations -over the past few decades, short-term interest rates have been the tool of choice to steer economies WORLD BOND MARKETS - answer-most important yields on government bonds Yield Curve — - answer-Graph curve function ECFC - answer-inflation forecast for US FX forecasting methods - answer-Foreign Exchange Forecasts BYFC - answer-Bond Yield Forecasts FEDERAL FUNDS TARGET RATE - answer-Current inflation rate + Real equilibrium federal funds rate + (1/2) x Inflation gap + (1/2) x Output gap Yield Curve - Inverted - answer-downward-sloping; long-term yields are lower than short-term yields -could mean recession is coming