Rates

Policy rates, bond yields and borrowing costs

These concepts are related, but they are not interchangeable. Understanding the distinction makes many market headlines easier to interpret.

Policy rates

A central bank policy rate is a benchmark used in monetary policy. It can influence financial conditions without mechanically determining every borrowing rate or market yield.

Bond yields

Bond yields are market prices expressed as rates. They can reflect expectations about inflation, growth, future policy and risk.

Borrowing costs

Household and business borrowing costs can be influenced by benchmark rates, bond markets, lender funding costs, credit risk and product structure.

Educational information only; not a forecast or recommendation.