Category: Interest rates

Zero lower bound

The Zero Lower Bound ( ZLB ) or Zero Nominal Lower Bound ( ZNLB ) is a macroeconomic problem that occurs when the short-term nominal interest rate is at or near zero, causing a liquidity trap and limiting the capacity of the central bank to stimulate Economic growth….


Zero interest-rate policy

Zero interest-rate policy ( ZIRP ) is a macroeconomic concept describing conditions with a very low nominal interest rate , such as those in contemporary Japan and December 2008 through December 2015 in the United States. ZIRP is considered to be an unconventional monetary policy instrument and can be associated with slow economic growth , deflation , and deleverage . [1]…


Wall Street Journal prime rate

The Wall Street Journal Prime Time (WSJ Prime Rate) is a measure of the US prime rate , defined by The Wall Street Journal (WSJ) as ” ” It is not the “best” rate offered by banks. It should not be confused with the federal funds rate by the Federal Reserve , though these two rates often move in tandem….


United States housing bubble

The United States housing bubble was a real estate bubble affecting over half of the US states . Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2012. [2] On December 30, 2008, the Case-Shiller home price index reported its largest price drop in its history. [3] The credit crisis resulting from the bursting of the housing bubble is-according…


Underwriting rate

In finance, an underwriting rate is a test interest rate used by a lender During the process of underwriting a loan , for the purpose of testing compliance with one or more debt covenants to help deterimine the maximum loan amount. As it is intended as a type of stress test , the underwriting rate is typically somewhat higher than the initial interest rate of the loan. Increasing the…


US prime rate

In general, the United States premium rate runs approximately 300 basis points (or 3 percent) above the federal funds rate . The Federal Open Market Committee (FOMC) meets eight times a year. Other rates, including the prime rate, derive from this base rate….


Time preference

In economics, time preference (or time discounting , [1] delay discounting , temporal discounting ) [2] is the current relative valuation Placed on receiving send a good at an Earlier Date Compared with receiving send it at a later date. [3]…


TED spread

The TED spread is the difference entre les interest rates are interbank loans and one short-term US government debt ( “T-bills”). TED is an acronym formed from T-Bill and ED , the ticker symbol for the Eurodollar futures contract….


Interest rate swap

In finance , an interest rate swap ( IRS ) is an interest rate derivative (IRD) . In particular it is a linear IRD and one of the most liquid , benchmark products. It has associations with forward rate agreements (FRAs) , and with zero coupon swaps (ZCSs) ….


FTSE MTIRS Index

The FTSE MTIRS Indices are designed to directly correlate to OTC’s Interest Rate Swaps market with a total of 45 indices covering the USD curve from 2 years to 30 years including spreads and butterflies. FTSE MTIRS Indexes for both fixed and floating rates and are rebalanced daily. The value of the FTSE MTIRS Index changes as the NPV…