Basis point
One hundredth of a percentage point: 3.00% to 3.25% is 25 basis points.
Definition
One hundredth of a percentage point: 3.00% to 3.25% is 25 basis points.
Why it matters
Rates are the price of money: they set the cost of credit, the value of bonds and, in turn, that of nearly every other asset.
How to read it in the news
Remember the golden rule: when rates rise, existing bond prices fall, and vice versa. Moves are read in basis points (0.01 point).
Notitia newsroom · education, not investment advice.