Asking for a Friend - I keep hearing that the Fed raised interest rates by basis points - what does that mean?

April 17, 2023

Question: I keep hearing that the Fed raised interest rates by basis points - what does that mean?

Answer: Basis points is a fancy way of saying interest rates. For example if they increased rates by 25 basis points, that means 0.25%; 100 basis points would be a full 1.00%.


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