This afternoon (11:00 am PST) wraps up the two-day FOMC meeting and we will learn if the Fed has decided to make any adjustments to the Fed Funds rate. Although the Fed does not directly control the interest rate of mortgage loans (except for home equity lines of credit that follow the prime rate), mortgage interest rates are influenced by the actions by the Fed.
Odds are that there will be no changes to the Fed funds rate today. Markets will be paying close attention to what Fed Chair Jerome Powell has to say following the Fed’s announcement of their rate decision.
As I write this (7:24 am on May 7, 25) mortgage-backed securities (MBS), what mortgage interest rates are based on, are pretty flat (up 7 basis points) and the Dow Jones is up 207 at 41,306.
Update 11:04 am: The Fed has left the Funds Rate unchanged. MBS is up 13 basis points and the Dow is up 201 for the day.
From the press release:
“Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated….
The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.”
I will update this post throughout the day. Stay tuned!
Today wrapped up the two-day FOMC meeting and Chairman Powell announced that the funds rate will be increased by a half point. As of today, the federal funds rate is 0.75-1% and is expected to another 2 percent by the end of the year.
The Fed’s announcement today to leave the funds rate unchanged was not a surprise to the markets. What did send the bond market in a tizzy this afternoon was that the Fed ever-so-slightly moved the goal posts out a bit for inflation. 
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