4 ms·
25 bits per second?
by ginko 3y ago
25 bits per second?
- dragontamer 3y agoBasis points. Aka: a percent-of-a-percent, or one-tenthousanth. 25 BPS is therefore 0.25%.
- mhh__ 3y agobasis points i.e. 0.01%
- ginko 3y agoWhy not say 0.25%? No one knows obscure English language economics terms.
- sudobash1 3y agoPresumably the target audience of federalreserve.gov does. I also know the terms, just from talking to a loan officer while shopping for a mortgage. So calling obscure may be a bit unfair. Also, bits per second is very familiar to many of us in the HN audience, but that is just because of our particular technical background. It is the same in other technical areas (such as finance).
- mhh__ 3y agoThe Fed could do a better job wrt to expanding that target audience. I've always found it slightly silly that getting the rates and prices needed to judge the performance of the Fed, Treasury, and so on effectively requires use of a Bloomberg terminal (there are structural reasons why this is the case but the fed wields a big stick). Even worse in the UK - DMO supposedly not competent in general but I have no first-hand experience.
- marvin 3y agoIt's a term of art in finance; people who work with it daily don't think twice before using it. Computer science has a whole book full of these; comes with the subject.
- shove 3y agoThat’s exactly why
- ginko 3y agoExactly why what? "0.25%" is a lot easier to understand. It's even fewer characters than "25 bps"
- nequo 3y agoBut it isn’t 0.25 percent. It’s 0.25 percentage points.[1] Writing 25 basis points is shorter than that. [1] https://en.wikipedia.org/wiki/Percentage_point https://en.wikipedia.org/wiki/Percentage_point
- bryanlarsen 3y agoIt's inaccurate. An 0.25% increase on 5% is 5.0125%.
- tmn 3y agoDo you see the ambiguity with saying it how you suggest now?
- deleted 3y ago[deleted]
- linhvn 3y agoTraders learn bps on the first day of their job, similar to you learn version control on your first day of your SWE intern. What's the difference?
- AdamH12113 3y agoIt would have been better to spell out "basis points" in the title, but the term is not at all obscure -- it's very widely used in the finance sector.
- ginko 3y agoThis is a tech forum, not a finance forum though. The original article doesn't even use bps. It just says "In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5-1/4 to 5-1/2 percent" The title could have just said "Fed raises rate from 5.25 to 5.50". That'd contained a lot more information.
- signatoremo 3y agoThis is not a tech forum. I bet the tech posts are less than 50%. How many times have you seen a post when the submitted article was scorned for not using accurate terminologies?
- marfil 3y agoMy guy, the forum is called "Hacker News", it can hardly be any more techy than it already is.
- signatoremo 3y agoSo it’s a tech forum because of the name? Can you count the number of non tech posts on the front page? Also, there is indeed high concentration of tech and science people, which love to scrutinize posts for inaccurate use of terminology or units. Yet you want to lower the standard when it comes to finance news?
- xnx 3y ago"25 bps" eliminates that ambiguity between "0.25%" meaning (current rate% + 0.25%) or (current rate% * 1.0025)
- LikesPwsh 3y agoBps is also specifically a flat change rather than relative to the previous value. E.g. If without bps if you have an interest rate of 2% and somebody states that it has increased by 10%, it's unclear whether they meant a result of 2.2% or 12%.
- Analemma_ 3y agobps = basis points. A basis point is 0.01% (absolute), so this means they raised rates by an absolute amount of 0.25%.