NewsDialy
A basis point is one one-hundredth of a percentage point — a unit of measurement the Federal Reserve uses so it can talk about interest rate changes with surgical precision.
When the Fed says it plans to cut rates by 25 basis points, it means borrowing costs will fall by exactly one quarter of one percent. Here is why that matters right now.
The Federal Open Market Committee — the FOMC, the body inside the Fed that actually sets interest rate policy — has signaled it intends to lower its benchmark rate by 25 basis points at its June meeting.
That signal came alongside fresh inflation data showing the Consumer Price Index rose just 2.4% year-over-year, the softest reading in roughly a year. Inflation, in other words, is cooling.
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