# What is the short rate a function of?

According to the expectations hypothesis we get the long rates via the expected short rates and then adding a term premium.

One therefore needs to consider how the short rate might change. I suppose the central bank essentially set this rate. This is done with the purpose to steer the economy.

To get an idea of how the short rate might evolve one might then consider the macro outlook right? i.e the future short rate is a function of growth in GDP, employment and inflation?

Is this the right idea?