Important Monetary Policy Question
What's the deal with "basis points"? Like if the Fed lowers interest rates from 4.5% to 4.25% why is that called a cut of 25 "basis points" instead of percentage points?
What's the deal with "basis points"? Like if the Fed lowers interest rates from 4.5% to 4.25% why is that called a cut of 25 "basis points" instead of percentage points?