Finance words, in plain English. When a story on this site uses a term, this is what it means — no jargon explaining jargon.
Basis point
One hundredth of one percent. When the Fed moves rates by 25 basis points, it moved them a quarter of a percent. Small numbers, real money.
Bond
A loan you make to a company or a government. They pay you interest, then pay you back at the end. Bond prices and interest rates move in opposite directions: rates up, prices down.
Brent crude
The global price benchmark for oil. When you see “oil rose,” it usually means Brent. It feeds into gas prices, airfare, and what it costs to move anything anywhere.
Buyback
When a company buys its own shares back from investors. Fewer shares left means each remaining share owns a bigger slice of the company. It is one way companies return money to shareholders.
Capital spending (capex)
Money a company spends on long-lived things: buildings, equipment, data centers. Big capex means a company is betting on growth — and spending shareholders’ money to do it.
CPI (Consumer Price Index)
The government’s main inflation report. It tracks what a standard basket of goods and services costs, month to month. When people say “inflation came in hot,” this is usually the report they mean.
Dividend
Cash a company pays its shareholders, usually every three months, just for owning the stock. Not every company pays one; younger companies often put the money back into growth instead.
Earnings
A company’s profit report, usually once a quarter. The headline number is profit per share, but what the company says about the future often moves the stock more than the profit itself.
Earnings guidance
The forecast a company gives for its own future sales and profit. When a company “cuts guidance,” it is warning that business will be weaker than it promised. Stocks tend to take that personally.
ECI (Employment Cost Index)
A quarterly report on what employers pay in wages and benefits. The Fed watches it because pay rising too fast can keep inflation rising too.
Federal funds rate
The interest rate the Federal Reserve actually controls. It is the rate banks charge each other for overnight loans, and it pulls almost every other rate — mortgages, car loans, credit cards — along with it.
FOMC
The Federal Open Market Committee, the group inside the Federal Reserve that votes on interest rates. It meets eight times a year. Its decision, and the words around it, can move every market at once.
Free cash flow
The cash a business actually has left after paying its bills and its capital spending. Profit can be an opinion; cash is harder to argue with. This is the money that funds dividends, buybacks, and big bets.
GDP (Gross Domestic Product)
The total value of everything a country produces. It is the widest measure of whether the economy is growing or shrinking. Two straight quarters of shrinkage is the popular, if unofficial, definition of a recession.
Inflation
Prices rising over time, which means each dollar buys a little less. A small amount is normal. Too much, too fast, and the Fed steps in with higher rates.
Jobs report
The monthly count of jobs added or lost, plus the unemployment rate. It is one of the first hard looks at how the economy did last month, and markets react within seconds.
Market cap
What a company is worth on the stock market: share price multiplied by the number of shares. A $10 stock is not “cheaper” than a $100 stock until you compare market caps.
Mortgage rate (30-year fixed)
What it costs to borrow for a house over 30 years, at a rate that never changes. Freddie Mac surveys it weekly. It follows the 10-year Treasury yield more than it follows the Fed directly.
Non-voting shares
Stock that pays like any other share but carries no vote on how the company is run. The owner gets the risk without the say. Who holds the voting shares holds the company.
PCE (Personal Consumption Expenditures)
Another inflation report, built from what people and businesses actually spend. It is the Fed’s preferred inflation measure, so it gets extra weight on decision day.
Productivity
How much the economy produces per hour of work. When productivity rises, companies can pay more without raising prices. It is the quiet number behind long-run living standards.
Recession
A broad, lasting downturn in the economy. Officially it is declared by a panel of economists looking at jobs, income, and production — usually months after it started.
Retail sales
A monthly report on how much shoppers spent. Consumer spending is most of the U.S. economy, so this is a direct read on its engine.
S&P 500
An index of 500 of the largest American companies. When news says “the market rose today,” this is usually the market they mean. Most retirement accounts ride on it.
Treasury yield (the 10-year)
The interest the U.S. government pays to borrow for 10 years. It is the most watched number in finance: mortgage rates, business loans, and stock valuations all take their cue from it.