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%