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%