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  1. Home
  2. /Glossary
  3. /Basis Point
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macro

Basis Point

One hundredth of a percentage point (0.

Definition

One hundredth of a percentage point (0.01%). Finance people use basis points because saying '25 basis points' is clearer than '0.25%' or 'a quarter percent.' When the Fed raises rates by 50 basis points, they're raising by 0.5%.

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Related Terms

Interest Rates

The cost of borrowing money, set by central banks and market forces.

Federal Reserve (Fed)

The central bank of the United States that sets monetary policy.

Yield

The income earned on an investment, expressed as a percentage.

Bitcoin Treasury Strategy

A corporate strategy of using company treasury funds and debt to buy Bitcoin, popularized by MicroStrategy's Michael Saylor.

CBDC (Central Bank Digital Currency)

A digital form of a country's official currency issued and controlled by its central bank.

Consumer Price Index (CPI)

A measure of average price changes for a basket of consumer goods and services.

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