Deep-dive library

LIBOR ended after manipulation exposed weaknesses in a benchmark already losing its transactional foundation. Its replacement required new rates, contract fallbacks and a staged global transition, not simply a new name.

How pandemic-era low yields turned into deep losses in long Treasury prices, why the 2023 rebound was incomplete, and what dated October 2026 evidence shows.

How a conventional convertible exchanges a lower cash coupon for possible equity participation, and why conversion value, repayment value and dilution are separate calculations.

How a Treasury payment becomes a standalone zero-coupon claim, why its price can swing sharply, and what a maturity match does and does not protect.

A credit default swap separates a defined credit exposure from ownership of a bond. Its economics depend on the premium, contractual credit event and settlement value, while funding, counterparty and basis risks prevent the quoted spread from being a simple default-probability forecast.

TIPS adjust principal for the specified inflation index and pay a fixed coupon on that changing amount. Their market prices still respond to real yields, while the gap between nominal Treasury and TIPS yields reflects more than a simple forecast of inflation.

A corporate bond’s repayment date can depend on an issuer option. Call protection, redemption formulas and purchase price shape the cash flows behind the stated coupon.

A currency forward fixes an exchange price, but that price reflects funding differentials and market frictions. Hedging can stabilize a known payment while leaving collateral, rollover and underlying business risks intact.

A municipal bond’s repayment depends on its issuer, pledged revenues and legal terms. General-obligation and revenue structures link public borrowing to different sources of cash and different constraints.

A long-term Treasury yield reflects both expectations about future short rates and compensation for bearing risk. The term premium is inferred through models, so its level, sign and changes depend on definitions and assumptions as well as market prices.

Treasury auctions turn a specified borrowing amount into an issuance price. The stop-out yield, bid coverage and bidder allocations reveal different things, and none alone measures fiscal confidence.

Treasury yields, contract rates and funding costs move on different clocks. Trace the effects on household payments, mortgage pricing, deposit competition and financial institutions’ earnings.

Version note: Broadened the interest-rate transmission framework to mortgages, deposits, securities and bank earnings; retained the card and installment examples and their original observation dates.