Quarter-point

Question

"Fed Delivers 7th Quarter-Point Rate Hike."

"Federal Reserve Pushes Key Interest Rate Up by a Quarter-Point to 2.75 Percent."

Please explain the two quotes above in detail.

Does 'deliver' mean 'give' in the first one?

Thanks,

MountainHiker · Accepted Answer

Hi,

A quarter point means 25 basis points or 0.25%. All are equivalent.

Fed "delivers" means that the Federal Reserve created/made happen/"delivered" a hike in the rates.

So both quotes mean that the FOMC raised its target rate for federal funds to 2.75%

Hope that helps.

MH

http://www.federalreserve.gov/BoardDocs/Press/monetary/2005/20050322/default.htm

For immediate release

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 2-3/4 percent.

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Output evidently continues to grow at a solid pace despite the rise in energy prices, and labor market conditions continue to improve gradually. Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices.

The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; Anthony M. Santomero; and Gary H. Stern.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 3-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, and San Francisco.

Meantolearn · Answer

Thanks, MH.

1. a point = 1 percent = 1%
a quarter point = 1/4 percent = .25 %

Can we say 'a half point' or 'half a point' to mean .50%?
Can we say 'three quarter point' to mean .75%?

2. rd. 'deliver'
There's a definition in dictionary:give birth to a baby
e.g. She delivered her third child at home.

Do you think the use of 'deliver' in our discussion is the same as the definition I cited?

MountainHiker · Answer

1. Point...yes, your definition is correct. HOWEVER, be careful. Sometimes you will hear "basis points". A basis point is 0.01%. In other words 25 basis points (bps) is a quarter point. Confusing? It is to me.

2. Deliver:

de·liv·er (di-liv'?r)

v., -ered, -er·ing, -ers.

v.tr.
1. To bring or transport to the proper place or recipient; distribute: deliver groceries; deliver the mail.
2. To surrender (someone or something) to another; hand over: delivered the criminal to the police.
3. To secure (something promised or desired), as for a candidate or political party: campaign workers who delivered the ward for the mayor.
4. To throw or hurl: The pitcher delivered the ball.
5. To strike (a blow).
6. To express in words; declare or utter: deliver a lecture.

7a. To give birth to: She delivered a baby boy this morning.
7b. To assist (a woman) in giving birth: The doctor delivered her of twins.
7c. To assist or aid in the birth of: The midwife delivered the baby.
8. To give forth or produce: The oil well delivered only 50 barrels a day.
9. To set free, as from misery, peril, or evil: deliver a captive from slavery. See synonyms at save1.
v.intr.

1. To produce or achieve what is desired or expected; make good: The senator delivered on her pledge. He is a manager who just can't seem to deliver.
2. To give birth: She expects to deliver in late August.
idiom:
deliver (oneself) of

To pronounce; utter: Before leaving I delivered myself of a few choice comments.

[Middle English deliveren, from Old French delivrer, from Late Latin deliberare : Latin de-, de- + liberare, to free (from liber, free).]

de·liv'er·a·bil'i·ty n.
de·liv'er·a·ble adj.
de·liv'er·er n.

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The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2004, 2000 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved.

See definition number 8. It matches your example.

Hope that helps.

MountainHiker

Meantolearn · Answer

Hi MH,

Thanks a lot for your prompt and detailed answers. I appreciate it.

rd. 'deliver'

I think def. 7 and 8 are similar. Don't you agree?
Giving birth is a way of producing a life. Isn't it?

Ciao

MountainHiker · Answer

Hi,

They all have similarities. To me, 7 refers to the act of childbirth. Whereas 8 is "delivering the goods," whatever those goods might be. So you can think of 7 as a specific form of 8. But I think of them separately.

She's about to deliver her first child. It's clear what that means.

That water well delivers 200 liters of water per hour. It is clear what that means.

You could say that those two examples are very similar, but, for whatever reason, I see them separately. Perhaps, I see one of nature and creation of life, and the other mechanical. In any event, you understand the difference and similarity.

On my resume, for example, I list one of my attributes as "Ability to deliver". It's a my way of saying, you give me the challenge and I will deliver results.

Hope that helps.

MH

Rwiles · Answer

0 Just a quick clarification of 'basis points' 02br
02br
00When talking about interest rates or percenatges, a point is 1% (and therefore a quarter point 0.25% as correctly suggested in previous posts) 02br
02br
00When talking about foreign exchange and when looking at exchange rates, a basis point is 0.0001 02br
00So if the GBP-USD echange rate was 1.8322, we could say it increased by 35 basis points (b.p.'s) to 1.8357 02br
02br
00It also worth noting that in treasury speak, a currency basis point is also called a 'pip' 0-

Miche · Answer

0 Just to add, 01blockquote

00A quarter point means 25 basis points or 0.25%.12blockquote

12br
02br
00This is true as long as you consider 0.25% as the percent of 01b00one02b00. Do not calculate it as 0.25% of 2.50 (that would give 0.00625). 02br
02br
00Further to rwiles's explanation about interest rates and exchange rates, what I do to avoid mistakes is just raise the figure given by the basis point given by adding the basis point 01b00to02b00 the given figure, depending on the number of figures after the point. 02br
00Example: 1.8322 + 0.0035 = 1.8357 (22+35=37, i.e. add the 01b00two02b00-digit basis point to the last 01b00two02b00 figures after the decimal point). 0-

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