Rates

Policy rates, bond yields and borrowing costs

These concepts are related, but they are not interchangeable.

Policy rates

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

Bond yields

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

Borrowing costs

Household and business borrowing costs can also reflect lender funding costs, credit risk and product structure.