B
- Bank Rate
- The Bank of England's policy rate, set by its Monetary Policy Committee. Bank of England decisions →
- Basis point (bp)
- One hundredth of a percentage point. A 25 bp cut takes a rate from 4.00% to 3.75%. Basis points to percent →
C
- Carry trade
- Borrowing in a low-rate currency to hold a high-rate one and earn the interest rate differential. It is unwound quickly when markets turn fearful. Rate differentials →
- Cash rate
- The Reserve Bank of Australia's policy rate: the rate on overnight loans between banks. RBA decisions →
- Central bank
- The institution that sets a currency's short-term interest rate and issues its money: the Fed for the dollar, the ECB for the euro. Central bank rates today →
- Close back
- A five-minute candle closing back inside the range of the hour before the decision, after the first spike broke out of it. On this site it is measured within 60 minutes of the announcement. How to trade rate decisions →
- Consensus
- The rate most economists expect a bank to set, published before the decision. The result is set against it to say whether a decision surprised. Hawkish vs dovish →
D
- Deposit facility rate
- The rate the ECB pays banks on money left with it overnight, and the rate it steers policy with. ECB decisions →
- Dot plot
- The Fed's chart of where each official expects the federal funds rate at the end of the next few years, published in March, June, September and December. Fed dot plot →
- Dovish
- Leaning toward lower interest rates, usually because growth and jobs worry a bank more than inflation. Hawkish vs dovish →
E
- Emergency (intermeeting) move
- A rate change between scheduled meetings, made in a crisis, as in October 2008 and March 2020. Fed funds rate history →
F
- Federal funds rate
- The rate US banks charge each other for overnight loans. The Fed sets a target range a quarter point wide for it. Fed decisions →
- FOMC
- The Federal Open Market Committee: the Fed's twelve voters on the federal funds rate, meeting eight times a year. FOMC meeting dates →
- Forward guidance
- What a central bank says about its next moves, in its statement or press conference. It often moves price more than the decision itself.
H
- Hawkish
- Leaning toward higher interest rates, or holding them high, usually to bring inflation down. Hawkish vs dovish →
- Hold (pause)
- A decision that leaves the rate unchanged. A hold can still read hawkish or dovish through what comes with it.
I
- Interest rate decision
- A central bank's announcement of its policy rate, at a set time on a published date, usually with a statement and often a press conference. The calendar →
- Interest rate differential
- The gap between two currencies' policy rates. A wider gap pays more to hold the higher-yielding currency. Rate differentials now →
M
- Main refinancing operations rate
- The rate at which the ECB lends to banks for a week. It was the ECB's headline rate until the deposit rate took over. ECB rate history →
- Market makers
- The banks and dealers who quote prices and take the other side of orders. Around a release they fill the stops that rest beyond the hour before.
- Minutes
- The record of a meeting's discussion, published weeks later (the ECB calls them accounts). They show how close the vote was to going the other way. FOMC minutes dates →
- MPC
- The Bank of England's Monetary Policy Committee: nine members whose vote split is published with each decision. BoE votes and history →
N
- Neutral rate
- The rate that neither speeds up nor slows down an economy. The Fed's "longer run" dot is its officials' estimate of it. The longer-run dot →
O
- Official Cash Rate (OCR)
- The Reserve Bank of New Zealand's policy rate. RBNZ decisions →
- Overnight rate target
- The Bank of Canada's policy rate. Bank of Canada decisions →
P
- Pip
- The usual unit of a currency move: 0.0001 on most pairs, 0.01 on yen pairs. Pips are not basis points →
- Pivot
- The turn from raising rates to cutting them, or back: the first move of a new cycle. Each bank's cycle →
- Policy rate
- The one short-term rate a central bank sets, from which the rest of the economy's rates follow.
- Press conference
- Where the chair or governor explains the decision and takes questions, often 30 minutes after it. The first move often turns there.
- Projections
- A bank's forecasts of growth, inflation and, at some banks, its own rate: the Fed's Summary of Economic Projections, the Bank of England's and Bank of Canada's Monetary Policy Reports. Fed dot plot →
Q
- Quantitative easing (QE)
- A central bank buying bonds to push long-term rates down when its policy rate is already near zero.
- Quantitative tightening (QT)
- The reverse of QE: letting the bonds it holds mature, or selling them, which pushes long-term rates up.
R
- Rate cut
- A lower policy rate: cheaper borrowing, usually to support growth and jobs. When the Fed cuts →
- Rate hike
- A higher policy rate: dearer borrowing, usually to slow inflation. When the Fed raises →
- Rate history
- A bank's every decision over time. This site has each bank's since 2008, with a CSV. Fed funds rate history →
S
- Smart money
- The large, informed players whose orders move price. Ahead of a release they wait for the stops to be run before committing.
- Stop hunt
- A move that runs through the levels where stop orders rest, fills them, and turns. On decision day the first spike through the hour-before range often does this. How to trade rate decisions →
- Surprise
- The decision against the consensus. Above it is a hawkish surprise, below it a dovish one; most decisions are neither. How often banks surprise →
T
- Terminal rate
- Where a hiking or cutting cycle is expected to stop. Past cycles →
- The hour before
- The high and low of the 60 minutes before an announcement. The stops rest just outside it, so the first spike often runs one side of it. How we measure →
- The other side
- After the first spike closes back inside the hour-before range, price trading through the opposite edge. This site counts it within four hours. How to trade rate decisions →
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