The gravitational constant of macroeconomics. Understand the pulse of banking, Net Interest Margins, and market sentiment.
Launch SimulatorBanks are fundamentally in the business of time travel. They take short-duration liabilities—like the cash in your checking account—and transform them into long-duration assets, like a 30-year mortgage for a homebuyer.
This dynamic is powered by the Net Interest Margin (NIM). A bank pays a low rate to depositors (the short end of the curve) and charges a higher rate to borrowers (the long end of the curve).
Yield on Earning Assets (Long-term rates) minus the Cost of Funds (Short-term rates). When the curve is steep, this spread is wide, and banks generate strong net interest income.
Controlled tightly by Central Banks (like the Federal Reserve). Driven by monetary policy to control inflation or stimulate growth.
Determined by collective investor sentiment. Driven by expectations of future economic growth and long-term inflation.
Manipulate macro-economic forces to see how the curve reacts and how it impacts bank profitability in real-time.
Green light for lending.
The market expects stable economic growth. The Federal Reserve is accommodating this by keeping short-term rates lower than long-term market expectations. Inflation is likely under control.