Hi, welcome to a new episode of The Art of Business English. We're gonna be looking at some vocabulary I've been putting together this week because of all the crazy things that have been going on with the global economy and the markets since the beginning of Jan of 2022.
I must admit it's not been the best start to the year for investors or for people in general, with things like inflation. So we're gonna be looking at a lot of the vocabulary that's been doing the rounds, in media, on the news or in the financial news. Some of this vocabulary you may have heard and maybe you're not really sure what it means generally.
So, get ready and learn with my impromptu lesson from my back garden.
Stagflation
Meaning:
Persistent high inflation combined with high unemployment and stagnant demand in a country’s economy.
Example:
"On the economic front he also confronted persistent stagflation."
Tightening/loosening
Meaning:
The action that a central bank takes to limit inflation and an overheating economy./The monetary policy of expanding the money supply to promote economic growth.
Example:
“Better to wait until bubbles burst and manage the consequences, softening the economic blow by loosening monetary policy very quickly.”
Basis point
Meaning:
The smallest unit of measurement for interest rates and other financial instruments.
Example:
“During the 2008-2011 period, annual losses were 184 basis points.”
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Hawkish
Meaning:
An aggressive tone. To increase interest rates and be less accommodating towards financial markets.
Example:
“The federal reserve uses hawkish language to describe the threat of inflation, one could expect stronger actions from the fed.”
Dovish
Meaning:
To favor looser, more accommodating policy
Example:
“Even a relatively dovish Bernanke Fed cannot afford to let the inflation-expectations genie out of the bottle via a monetization of the fiscal bailout costs.”
Rate hike
Meaning:
To increase interest rates.
Example:
“He said the recent interest rate hike may draw more buyers into the market to take advantage of low rates while they can.”
Rally
Meaning:
When stock market goes up.
Example:
“Miners, though, missed out on the rally as metals prices weakened thanks to the stronger dollar.”
Sell-off
Meaning:
When stock market goes down.
Example:
“Several traders reported assuming that some bad news such as a terrorist attack had sparked the sell-off.”
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Sell in May and go away
Meaning:
To sell everything in May and come back after summer.
Example:
“I know you're happy with how your stocks are performing now, but sell in May and go away, you won't regret it”
Market volatility
Meaning:
When markets go dramatically up and down.
Example:
“Pension funds, hit hard by market volatility, could better protect returns by upping their long-term risk-free holdings.”
Upside
Meaning:
To see growth or potential for growth in your assets.
Example:
“These value stocks offer up to 116% upside potential in the ongoing bull run.”
Downside
Meaning:
To see a lot of risk to investing.
Example:
“The downside market factor explains the returns to currency portfolios sorted by the forward discount better than other factors previously proposed in the literature.”
Final thoughts
Well, there you have it folks. I hope you found this episode interesting and useful. If you have any questions then just drop me a comment or send me a voice message.
If you're interested in expanding your knowledge of vocabulary, download your copy of my eBook, "500 business English collocations for everyday use" which also includes the pronunciation in mp3 format for free.
See you next week.
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