Central banks, like the Federal Reserve, primarily raise or lower interest rates to control inflation.

• Consumer Price Index (CPI) – monthly report showing how prices for consumer goods/services are changing

• Personal Consumption Expenditures (PCE) – the Fed's preferred inflation gauge

High inflation = Higher interest rates

Low/stable inflation = Rates may stay the same or decrease

These set the tone and policy outlook for future rate moves:

• Federal Open Market Committee (FOMC) meetings (8 times per year)

• Fed Chair speeches (e.g., Jerome Powell)

• The "dot plot" – Fed's projections of future rate hikes/cuts

Look for keywords like "hawkish" (pro-hikes) or "dovish" (pro-cuts).

Bond yields reflect market expectations of future interest rates.

• U.S. 10-year Treasury yield – often moves ahead of Fed decisions

• Yield curve inversion – when short-term rates are higher than long-term ones, often signals recession (and possible rate cuts).

Rising yields = Market expects higher future rates

Falling yields = Market expects cuts or economic slowdown

Strong job growth and wage increases can fuel inflation, pushing rates up.

• Nonfarm Payrolls (NFP) – monthly U.S. jobs report

• Unemployment rate

• Average hourly earnings – a proxy for wage inflation

Hot labor market = Fed may hike to cool inflation

Weak labor market = Fed may pause or cut

Central banks balance rate decisions between controlling inflation and supporting growth.

• Gross Domestic Product (GDP) – quarterly growth numbers

• Retail sales – consumer spending trends.

• ISM Manufacturing & Services Indexes – business sentiment

Strong growth = Fed may tighten

Weak growth = Fed may ease