Not exact matches
Treasuries also come
in various structures,
like Treasuries with coupons, zero - coupon Treasuries, and Treasury
inflation - protected securities (TIPS), whose principal and returns adjust to reflect
changes in the consumer price index.
What the conventional scoring process does not do is incorporate the the effects of any
changes in macroeconomic variables — things
like GDP,
inflation, and employment — and how those might alter the cost estimate.
Furthermore, the Fed would
like to adhere to the so - called «Taylor Rule» (
in spite of Professor Taylor's protestations that it is misinterpreting and misusing his concept), a mathematical construct that purports to make monetary policy more «scientific» by establishing an arithmetic rule for varying the administered interest rate according to the variance of «actual from target
inflation» (note that «
inflation» refers to the
change in a price index
in this case, not the phenomenon of
inflation of the money supply as such), as well as the variance of economic output from «potential output» (i.e, the so - called «output gap» is incorporated
in the formula as well).
Higher rates of
inflation and rising levels of correlations between the
changes in bond yields and stock yields don't sound
like a good combination, and it turns out that they're not.
The mortgage rates are continuously altering due to several economic factors
like inflation, economic growth or slump and
changes in supply and demand of mortgage loans.
Yield curves
change shape as the economic situation evolves, based on developments
in macroeconomic factors
like interest rates,
inflation, industrial output, GDP figures and balance of trade.
It's probably good to consider revisiting your budget when life -
changing events occur, and set intervals to adjust for smaller stuff
like inflation and
changes in fixed costs.
Yearly (or monthly) payments can increase by a predetermined value each year (usually 3 - 5 %) or by
changes in an
inflation index
like the CPI.