Glossary
23 terms in federal economic and legislative policy, each on its own page, each written to be understood without the others.
Looking for a straight answer to a question? Every term phrased as the question it answers →
A
Appropriations
The annual laws that give federal agencies legal authority to spend money.
B
Basis point
One hundredth of one percentage point. A 25 basis point cut is a quarter of one percent.
Budget resolution
A congressional blueprint setting spending and revenue totals. It is not a law and the president does not sign it.
Byrd rule
A Senate rule that strikes provisions from a reconciliation bill when they are not primarily budgetary.
C
CBO baseline
The Congressional Budget Office's projection of spending, revenue and debt under current law.
Consumer Price Index
A monthly measure of the average change in prices paid by urban consumers for a basket of goods and services.
Continuing resolution
A temporary funding measure that keeps agencies open at existing levels when the appropriations bills are not finished.
Cost-of-living adjustment
The annual increase applied to Social Security benefits, indexed to a measure of consumer prices.
D
Debt ceiling
A statutory cap on total federal borrowing. It limits paying for spending already authorised, not new spending.
Deficit
The amount by which federal spending exceeds federal revenue in a single year.
Discretionary spending
The portion of federal spending set each year through the appropriations process.
Dot plot
A chart in the Fed's quarterly projections showing where each FOMC participant expects rates to be at future dates.
Dual mandate
The two goals Congress set for the Federal Reserve: maximum employment and stable prices.
F
Federal funds rate
The interest rate banks charge each other for overnight loans of reserves.
I
Inflation
A general rise in the level of prices across an economy, which lowers what a unit of currency will buy.
M
Mandatory spending
Federal spending that flows from permanent law rather than annual appropriations.
N
National debt
The accumulated total the federal government owes, built up from every past year's deficits and surpluses.
O
Open market operations
The purchases and sales of securities the New York Fed uses to keep the federal funds rate inside the FOMC's target range.
Outlays
Money the federal government actually pays out in a period, as distinct from what it is authorised to spend.
Q
Quantitative easing
Large-scale purchases of Treasury and mortgage-backed securities by the central bank, which add reserves to the banking system.
Quantitative tightening
Shrinking the central bank's balance sheet by letting securities mature without replacing them.
R
Reconciliation
An expedited budget procedure that lets certain fiscal legislation pass the Senate by simple majority, without being subject to a filibuster.
Y
Yield
The return an investor earns on a bond, expressed as an annual percentage of its price.