Basis point (bp)
MarketsDefinition
One hundredth of one percent. Used because saying "0.25%" is ambiguous (is that 0.25% of the rate, or 0.25 percentage points?). Basis points remove the confusion.
Formula
1 bp = 0.01% = 0.0001
Example
The Fed raised rates by 25bp = 0.25 percentage points. If rates were 5.00%, they're now 5.25%.