I was studying about the interest rate term structures and i came across term structure model with (and without) drift.
I am really unsure about what this drift is in this equation for term structure model. $$dr=\lambda dt + \sigma dw$$
From the equation above $\lambda$ is the drift factor and $\lambda dt$ is the drift. I have a very confusing explanation of drift which is along the lines of interest rates are moved in the future by some factor.
Can someone give me an explanation of drift. An example associated with it would be ideal. Thanks!