Fed policy has been the primary force driving the money and bond markets for the past few years. This week on the Basis Points podcast, Kevin Flanagan discusses how the Fed's data dependency has led to volatility in the bond market.
Basis point: 1/100th of 1 percent.
Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.
