Forward rate
The rate for a future stretch of time extracted from today's curve: what the market has priced in for a period that has not started yet.
Formula
s_1 and s_2 are the spot rates for one and two periods and f is the forward rate for the second period. The identity states something simple: two short investments in a row and one long one must end up in the same place.
How to read the number
Forward rates show the path the market has already put into prices — that is, the course of events that would surprise nobody.
When the metric lies
Also known as: implied forward rate