Why does the Federal Reserve change interest rate by a multiple of 25 bps at a time?

0 ⤊

Why does the Federal Reserve change interest rate by a multiple of 25 bps at a time?

Why not by 30 bps or 80 bps?

2007-10-31 12:28:21 · 2 answers · asked by minsterkimster 1 in Social Science ➔ Economics

2 answers

The data they use isn't of sufficient quality to be able to make precise estimates. Rounding to quarters or eighths is tradition. The Federal Government doesn't budget enough to collect the data necessary for higher quality estimates.

2007-11-01 03:42:04 · answer #1 · answered by OPM 7 · 0⤊ 0⤋

they don't want to cause a panic of sorts

2007-10-31 19:32:07 · answer #2 · answered by Anonymous · 0⤊ 0⤋