Markets & Macro
The big-picture forces driving economies and markets.
Markets and the economy move together, and this topic follows the linkages that connect them.
It gathers the big-picture forces an investor has to read: the business cycle and where we sit in it, the yield curve and what an inversion signals, credit spreads as a gauge of stress, and the GDP, inflation, and employment data that shift expectations.
It also reaches into capital markets and financial history, so booms and crashes read as patterns rather than surprises.
Investing With Purpose treats macro as the context for every position you hold, not abstract theory.
Work through it and the headlines start to fit a framework instead of arriving as noise.
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The business cycle is the recurring pattern of expansion and contraction in aggregate economic activity. Understanding…
The yield curve is the line you get when you plot US Treasury yields against their maturities, from 1-month bills out…
A credit spread is the extra yield a corporate bond pays over a Treasury of the same maturity. It is the market's price…
Gross Domestic Product is the headline number for the size of a country's economy. It measures the market value of all…
Inflation is a sustained rise in the general price level of goods and services. Three official U.S. indexes measure it…
Forex, short for foreign exchange, is the global market where one currency is traded for another. It is the largest…
More in Markets & Macro
An interest rate is the price of money over time. If you borrow, it is the rate you pay. If you lend or save, it is the…
The federal funds rate is the overnight interest rate at which US banks lend reserve balances to each other. It is the…
The Federal Reserve is the central bank of the United States. It sets monetary policy, supervises banks, and manages…
Every forex trade involves two currencies, written together as a pair such as EUR/USD or USD/JPY. Pairs are grouped…
An FX rate is a ratio between two currencies. The first currency in the pair is the base, the second is the quote, and…
A pip is the standard unit used to measure how much an exchange rate has moved. A pipette is one-tenth of a pip, the…
The bid-ask spread is the gap between the price at which you can sell a currency pair (the bid) and the price at which…
Forex trades around the clock, but not evenly. Activity moves through four main regional sessions, and liquidity rises…
The Federal Open Market Committee (FOMC) is the body inside the Federal Reserve that actually votes on US monetary…
US Treasury yields are the interest rates the federal government pays to borrow across the maturity spectrum. They are…
The **nominal rate** is the headline interest rate you see quoted. The **real rate** is what is left after you strip…
**Quantitative easing (QE)** is when a central bank buys large quantities of long-dated bonds to push down long-term…
Each month the Bureau of Labor Statistics publishes the **Employment Situation** report, covering the unemployment rate…
The **Purchasing Managers' Index (PMI)** is a monthly survey of supply-chain executives that tracks whether business…
**Initial jobless claims** count the number of people who filed a new unemployment-insurance claim during the prior…
Consumer sentiment surveys translate how American households feel about their finances and the broader economy into a…
The Cboe Volatility Index, better known as the VIX, measures the market's expectation of 30-day forward volatility on…
Recession and stagflation are often used as if they are interchangeable labels for bad economies, but they describe…
Foreign exchange, or FX, is the market where one currency is traded for another. It is the largest financial market on…
The Dollar Index, ticker DXY, measures the value of the US dollar against a basket of six developed-market currencies.…
A commodity super-cycle is a multi-decade swing in broad commodity prices driven by structural demand shocks meeting…
Sector rotation is the idea that equity sectors take turns leading the market as the economy moves through expansion…
Geopolitical risk is the threat, realisation, and escalation of adverse events tied to wars, terror, and state-to-state…
The balance of trade records the value of a country's exported goods and services minus its imports. The current…