Glossary · from the DESK dictionary
Central Bank
The institution responsible for a currency's monetary policy and price stability.
In plain words
The "bank of banks" — manages interest rates and the money supply to influence inflation and employment.
In more detail
Well-known examples are the US Federal Reserve, the European Central Bank (ECB), and the Bank of Japan. Central banks influence markets primarily through policy rate decisions, forward guidance, and balance-sheet policy (see quantitative easing).
Example
The Fed raises the policy rate to fight inflation, which often leads to falling bond and stock prices.
What it means for traders
Central bank decisions are among the most market-moving events there are.
Common pitfalls
Central bank policy missteps (too late/early, too much/little) can have substantial economic consequences.
Related terms
Alan Greenspan · Unemployment Rate · Austan Goolsbee · Beige Book · Christine Lagarde · Chinese Renminbi/Yuan (CNY) · Euro (EUR) · British Pound (GBP) · Monetary Policy · Global Macro · Hawkish vs. Dovish · Israeli Shekel (ILS) · Janet Yellen · Jerome Powell · Policy Rate · Mario Draghi · Singapore Dollar (SGD) · Swiss Franc
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.