Basis points.
One basis point is one hundredth of one percent. So 100 bps = 1%.
Every Fed move, every bond yield headline, every credit-spread story uses it.
Why it matters: When you see "the Fed cut 25 bps," that's 0.25%. Misreading it by 10x is the difference between routine and panic.
Technical and plain English.
Basis point (bps or bp). A unit equal to 1/100th of one percent (0.01%), used in finance to express interest rates, bond yields, credit spreads, and percentage-point changes with precision. 100 basis points equal 1.00 percentage point. The convention exists to disambiguate relative versus absolute percentage changes.
One basis point is one hundredth of one percent. The reason finance people use it: "the rate went up 1%" is ambiguous. Was that 1 percentage point or 1% of the original number? Basis points fix that. 25 bps cut = 0.25%. 50 bps = 0.5%. 75 bps = the Fed is panicking.
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