Why the RBA Probability Summary and the Granular Rate Chart give different hike percentages — and why both are correct
Explains why the RBA Probability Summary (ASX single-step binary method) and the Granular Rate Change Probabilities chart (CME expanding tree) produce different hike percentages for the same meeting — including the full formulas, a worked numerical example, and when each measure is the right one to use.
How the FedWatch Tool calculates probability trees for multiple Fed meetings
Detailed explanation of the CME FedWatch Tool's expanding tree methodology for calculating FOMC rate probabilities from Federal Funds futures prices. Learn the assumptions, calculations, and limitations of this widely-used approach to monetary policy expectations extraction.
The most consequential economic variable that cannot be directly observed
Explore the enhanced methodology behind output gap analysis used by central banks, featuring live results and comparisons.
How central banks use a simple formula to guide interest rate decisions
Explore the Taylor Rule methodology and its application in monetary policy analysis. Understand the key parameters and their significance.
The no-arbitrage relationship between interest rates, spot exchange rates, and forward currency markets
Explore the Covered Interest Rate Parity (CIP) model, its mathematical framework, real-world applications, and significance in global financial markets.
A parametric framework for yield curve estimation used by central banks and financial institutions worldwide
Comprehensive overview of the Nelson-Siegel-Svensson methodology for yield curve estimation, including interactive demos and practical applications.