Gross Domestic Product (GDP)
The total value of goods and services produced in an economy.
What is Gross Domestic Product (GDP)?
The headline measure of economic size and growth. Real GDP adjusts for inflation; nominal does not. Growth rates drive corporate earnings expectations and, through them, equity valuations.
Gross Domestic Product (GDP): a worked example
Real GDP growth of 2.5% against 1.8% expectations moves rate expectations and markets.
More terms in Macro & Markets
Inflation
A general rise in prices that erodes purchasing power.
Real vs. Nominal Return
Return after inflation versus the headline number.
Federal Funds Rate
The overnight interbank lending rate targeted by the Fed.
Monetary vs. Fiscal Policy
Central bank rate and money supply tools versus government tax and spending.
Yield Curve
A plot of Treasury yields across maturities.
Yield Curve Inversion
Short-term yields exceeding long-term yields - a recession signal.
Recession
A significant, broad, sustained decline in economic activity.
Quantitative Easing
Central bank purchases of long-dated assets to push down long rates.