Forward rates compute the borrowing cost of money for a future period. They're derived from the existing interest rates in the market. Useful to compare investments, arbitrage on lend/borrow positions and even predict future inflation value

Forward rates compute the borrowing cost of money for a future period. They're derived from the existing interest rates in the market. Useful to compare investments, arbitrage on lend/borrow positions and even predict future inflation value

Here's the concept visualized 👇