Macro Beginner to advanced
The Economy and the Fed: The Data and Decisions That Move Markets
Eight times a year the Fed meets, and every month a handful of data releases reprice trillions of dollars of assets in seconds. These guides explain what each release measures, how to read the actual document, and why markets react the way they do.
Eight times a year the FOMC sets the rate that anchors every other rate in the economy, and between those meetings a handful of data releases reprice trillions of dollars within seconds of publication. This section explains what the Fed actually does, how its decisions travel through to stock and bond prices, and how to read CPI, the jobs report, GDP and the rest of the calendar on the morning each one lands.
It is written for everyone. It suits investors who keep hearing that the market fell on an inflation print and want to know which number people were looking at and why a tenth of a percentage point mattered so much. Nothing here requires training in economics, though the guides do walk through the actual release documents, using the same tables the trading desks read.
Start with the pillar on the Fed: its structure, the meeting calendar, the dual mandate and how the funds rate is enforced in practice. The rates and stocks guide then shows the discount rate channel with a worked example, so the mechanism stops being an abstraction. After that the data guides stand alone, so read CPI, payrolls and GDP in whichever order interests you. Quantitative easing, recession indicators and the calendar guide close the section.
Macro is the layer under everything else on the site. The front end of the yield curve in the bonds section is a direct function of the funds rate. Growth stock valuations swing on the discount rate. Traders use the calendar guide to decide which mornings to stay flat. The Pro Desk builds on all of it with fed funds futures, the dot plot and a regime framework for allocating across assets.
How the Federal Reserve Works: The FOMC, Rates and the Dual Mandate
Congress built the Federal Reserve out of an argument it could not settle, and the committee that sets the price of overnight money publishes everything it decides. Reading those documents is the skill.
Read the guide →Start with the basics
- beginner
Inflation and CPI Explained: Headline, Core and Reading the Release
The CPI release opens with the same two sentences every month, and everything that follows explains them. Here is how to turn an index level into a rate yourself.
- beginner
The Jobs Report Explained: Payrolls, Unemployment and Wages
Payrolls come from business records and the unemployment rate comes from households, and the Bureau of Labor Statistics is careful to say when a change is too small to call a change.
- beginner
GDP Explained: What It Measures and the Three Estimates
The man who built the national accounts told Congress in 1934 that the welfare of a nation could scarcely be inferred from them. The number has been treated as a verdict on national wellbeing ever since.
- beginner
The Economic Calendar: Which Releases Move Markets and When
Every month runs the same order, and a handful of entries in it account for most of the sharp intraday moves in Treasuries. Learn the sequence once and it serves for years.
Go deeper
- intermediate
How Interest Rates Affect Stocks: Discount Rates and Duration
One percentage point on the discount rate can take a third off a fast-growing company without anything happening at the company. Here is the arithmetic, and here is where it stops explaining anything.
- intermediate
Quantitative Easing and Tightening: The Fed's Balance Sheet
The Bank of Japan gave the policy its name in 2001 and the label unconventional stuck for a decade. Two crises later, the balance sheet is an ordinary instrument with ordinary accounting behind it.
- intermediate
Recession Indicators: Yield Curve, Sahm Rule, Claims and the LEI
The committee that dates American recessions has announced a turning point more than a year after it happened. These are the measures people watch in the meantime, with the failures attached.
- intermediate
The Dollar Explained: DXY, Rates and Why It Moves Markets
The most watched dollar gauge is six currencies wide and more than half euro. Here is what it measures, what moves it, and where a rising dollar shows up in a portfolio.
Economy & the Fed: common questions
What does the Federal Reserve actually do?
It sets short-term interest rates in pursuit of maximum employment and 2% inflation, supervises banks, and acts as lender of last resort. The FOMC meets eight times a year to set the target range for the federal funds rate.
How do interest rates affect stock prices?
Higher rates raise the discount rate applied to future profits, which lowers the present value of earnings arriving years from now. That hits fast-growing companies hardest and raises borrowing costs across the economy.
What is the difference between CPI and core CPI?
Headline CPI covers the whole basket. Core CPI strips out food and energy, which swing for reasons monetary policy cannot influence. The Fed watches core measures and the PCE price index more closely than headline CPI.
Why do stocks sometimes fall on good economic news?
Strong data can mean the Fed holds rates higher for longer, which lowers the present value of future earnings. The reaction depends on where the Fed sits in its cycle rather than on the data in isolation.
Which economic reports move markets the most?
CPI and the monthly jobs report reliably move both stocks and bonds. FOMC decisions, PCE inflation, retail sales and the ISM surveys follow. GDP moves markets less because it arrives long after the quarter it measures.