What are Terminologies Used on US Interest Rates?

Terminologies Used on US Interest Rates and Economy Indicators include:

Basis Point - A unit of 0.01% to measure percentage changes. For example, the Fed raises rates by 25 basis points, increasing Fed Discount Rate from 4.5% to 4.75%.

Consumer Price Index (CPI) - An indexed price measures how much the prices of goods and services have changed over time in US, using a representative basket of about 80,000 goods and services. CPI is indexed using the December 1982 measurement at the base value of 100.

Effective Fed Funds Rate - An average (volume-weighted median) of interest rates on overnight interbank loans published daily by the Fed Reserve. It should be in the target range (Fed Funds Rate) set by the Federal Reserve.

Fed Discount Rate - The interest rate set by the Federal Reserve that applies on short-term loans (<= 90 days) for commercial banks to borrow money from the Federal Reserve. Loan values are discounted upfront to compensate interests when given to borrowing banks. The Fed Discount Rate is reviewed and published every 6 weeks by the Federal Reserve Board.

Fed Discount Window - The practice of providing short-term loans to commercial banks. This is because, back in the old days, bank representatives have to physically go to a teller window at a Federal Reserve Bank branch to request short-term loans.

Fed Funds Rate - The interest rate range set by the Federal Reserve that applies on short-term (<= 90 days) loans for commercial banks to borrow money from each other. It is reviewed and published every 6 weeks by the Federal Reserve's Federal Open Market Committee (FOMC).

Gross Domestic Product (GDP) - Also called the Real GDP. It is the seasonal adjusted and constant-dollar priced total value of goods and services produced in the United States. It is collected and reported quarterly by US Bureau of Economic Analysis.

GDP Growth Rate - Commonly refers to the Annualized Quarter-over-Quarter (QoQ) change rate of the US Real GDP.

Half Point - A unit of 0.50% to measure percentage changes. For example, the Fed cuts rates by a half point, lowering Fed Discount Rate from 5.5% to 5.0%.

Inflation Rate - The annual or monthly change rate of Consumer Price Index (CPI). It is calculated and published monthly by US Bureau of Labor Statistics (BLS).

Prime Rate - A national average of prime rates commercial banks charge on short-term loans to their most creditworthy customers. It is calculated and published daily by the Wall Street Journal (WSJ).

Quarter Point - A unit of 0.25% to measure percentage changes. For example, the Fed raises rates by a quarter point, increasing Fed Discount Rate from 4.5% to 4.75%.

⇒ Interest Rates

⇐ 5-Year GDP numbers and Growth Rates

⇑ Commonly Used Terminologies

⇑⇑ Interest Rates