In the

bond market, the smallest measure used for quoting

yields is a

basis point.

Each percentage point of yield in bonds equals 100 basis points.

Basis points also are used for

interest rates. An interest rate of 5% is 50 basis points greater than an interest rate of 4.5%.

When it is said

*"The Fed is raising Interest Rates 25 basis points"*, this means (in everyday english) interest rates are being raised 0.25%