> For the complete documentation index, see [llms.txt](https://elevated-fx.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://elevated-fx.gitbook.io/docs/knowledgebase/glossary/economic-news.md).

# Economic News

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<summary><strong>Central Bank</strong></summary>

The central bank is like the money manager for an entire country. It makes sure there's enough money circulating in the economy and plays a big role in shaping interest rates. In the United States, the central bank is the Federal Reserve, while in the Eurozone, it's the European Central Bank. These banks use various tools, like adjusting interest rates or buying and selling financial assets, to keep the economy running smoothly.

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<summary><strong>Interest Rates</strong></summary>

Interest rates are like the cost of renting money. When you borrow money, you typically have to pay back more than you borrowed, and the extra amount is the interest. Central banks use interest rates to control the economy. If they want people to spend more, they might lower interest rates to make borrowing cheaper. If they want to cool down spending, they might raise interest rates.

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<summary><strong>Inflation</strong></summary>

Inflation is like a slow increase in the prices of things we buy, such as groceries, clothes, and services. When inflation happens, money doesn't buy as much as it used to. For example, if a chocolate bar cost $1 last year and inflation is 2%, this year it might cost $1.02. Central banks often aim to keep inflation at a moderate level to ensure the economy stays healthy.

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<summary><strong>Deflation</strong></summary>

On the flip side, deflation is when prices decrease over time. While it might sound good for consumers initially, it can be problematic. If people expect prices to keep falling, they might delay spending, thinking they can get a better deal later. This can slow down economic activity. Central banks usually try to avoid prolonged periods of deflation.

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<summary>Dovish</summary>

Dovish means a central bank is leaning towards being supportive by keeping interest rates low or introducing measures to boost the economy.

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<summary>Hawkish</summary>

Hawkish means a central bank is looking to tighten its grip on the economy by raising interest rates to control inflation.

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<summary><strong>Rate Cuts</strong></summary>

Rate cuts happen when a central bank decides to make it cheaper to borrow money. It's like a way to encourage people and businesses to spend and invest more.

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<summary><strong>Rate Hikes</strong></summary>

Rate hikes occur when a central bank decides to make borrowing a bit more expensive. This is done to prevent the economy from getting too hot and causing inflation.

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<summary><strong>GDP (Gross Domestic Product)</strong></summary>

GDP measures how well a country's economy is doing. It adds up the value of all the things produced in the country, like goods and services.

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<summary><strong>ECB (European Central Bank)</strong></summary>

The ECB is the bank that looks after the euro. It makes decisions similar to the U.S. Federal Reserve, affecting interest rates and the general economy in the Eurozone.

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<details>

<summary>CPI (consumer price index)</summary>

CPI is a way to figure out how much the prices of everyday goods and services change over time. It's a key tool to see if prices are going up (inflation) or down.

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<summary><strong>NFP (Non-Farm Payrolls)</strong></summary>

NFP is a report that tells us how many people in the U.S. are getting paid for their work, excluding certain jobs like farming. It's a good indicator of how healthy the job market is.

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<summary>FOMC (<strong>Federal Open Market Committee</strong>)</summary>

FOMC is like the decision-making team of the U.S. Federal Reserve. They meet to discuss and decide on important things, like interest rates and the overall money situation in the country.

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