Basis Point Explanation

The speaker covers the basics of a basis point.  A basis point is the smallest unit of measure to account for changes in rates of a financial instrument.  1 basis point equals 1/100th of a percent.  If the Fed lowers the rates from 3 to 2.5%, it can be said tThe speaker covers the basics of a basis point.  A basis point is the smallest unit of measure to account for changes in rates of a financial instrument.  1 basis point equals 1/100th of a percent.  If the Fed lowers the rates from 3 to 2.5%, it can be said that they made a 50 basis point drop.