The most regularly traded structure in the inflation-linked swaps market, and particularly in the inter-dealer market, is the zero coupon inflation swap. One counterparty agrees to pay the cumulative percentage increase in the price index over the tenor of the swap (with some lag on the reference index, similar to cash securities), and the other pays a compounded fixed rate. … [Read more...]
Role of Inflation in Stock Market
INFLATION's EFFECT ON STOCK MARKET: Understanding inflation is crucial to investing because inflation can reduce the value of investment returns. Inflation affects all aspects of the economy, from consumer spending, business investment, and employment rates, to government programs, tax policies, and interest rates. It is because of the inflation that share market has … [Read more...]