Definition
One-hundredth of a percentage point. 100 basis points equal 1 percentage point.
The story
When the Fed raised rates by 25 basis points in September, that's a quarter of a percentage point. On $10,000 of debt, that's $25 more in interest a year. Small per dollar, big across a whole economy.
Why markets watch it
Rate moves and bond yields are measured in basis points.
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We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms