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Rates
17 guides in Finabase Learn
- Basis point One hundredth of a percentage point (0.01%), the standard unit for quoting changes in interest rates, yields and fees.
- Bond A loan from an investor to a government or company that pays interest on a schedule and returns the principal at maturity.
- Central bank A national institution that manages a country's currency, money supply and short-term interest rates, such as the Federal Reserve.
- Federal funds rate The overnight rate at which US banks lend reserves to each other; the Federal Reserve sets a target range for it.
- Interest rate The price of borrowing money, stated as a yearly percentage of the amount borrowed, and the return paid to savers and lenders.
- Interest-rate risk The risk that rising interest rates lower the price of existing bonds and other rate-sensitive investments.
- Inverted yield curve A yield curve on which short-term yields exceed long-term yields, which has preceded most US recessions since the 1960s.
- Quantitative easing (QE) A central bank buying large amounts of bonds with newly created reserves to push down longer-term interest rates and ease credit.
- Quantitative tightening (QT) A central bank shrinking its bond holdings, usually by letting them mature without reinvesting, to reverse quantitative easing.
- Rho The option Greek measuring how much an option’s price changes for a one-percentage-point move in interest rates.
- Risk-free rate The return on an investment with essentially no default risk, usually proxied by short-term US Treasury yields, used as a baseline.
- Treasury bond Long-term US government debt issued with a 20- or 30-year maturity, paying a fixed coupon every six months and highly sensitive to interest rates.
- Treasury note US government debt with a maturity of two to ten years that pays a fixed coupon every six months; the 10-year note is a global benchmark rate.
- Treasury yield The annual return investors earn for lending to the US government at a given maturity, the benchmark that most other interest rates are priced from.
- Yield curve A line plotting Treasury yields across maturities, from months to 30 years, whose slope reflects rate expectations and is read as an economic signal.
- Yield to maturity (YTM) The annual return a bond delivers if bought at today’s price and held to maturity, counting every coupon plus the gain or loss to face value.
- Zero-coupon bond A bond that pays no periodic interest, sold at a deep discount and repaid at full face value at maturity, so the discount is the return.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.