It’s Fed Decision Day. Are Rates Going Up?


Filed under: Market Comentary


The Fed will be deciding again today whether rates will be going up. I always keep my network updated about the changes that are happening with mortgages, so I wanted to share some insight into what to expect with mortgage rates. I talk about this topic pretty much every time The Fed meets since it’s such a big deal.

Every time I point out the same fact, and this video is no different: The Fed’s decision about interest rates doesn’t correlate directly to mortgage rates. But it still prompts the question, and people ask me about how mortgage rates will be affected.

What Rates are Affected By the Fed Decision?

The Fed has a 2-day meeting, which happened yesterday and today. At the end of today’s meeting, the chairman will come out and announce whether they voted to increase interest rates today.

It’s important to clarify what rate was affected by the decision. There are many different rates: credit cards, mortgages, and other types of loans. This decision is related to the Fed Funds Rate, which is the shortest interest rate and basically what the banks charge each other. In recent meetings, The Fed has been bumping this rate up a quarter of a point at each meeting.

Despite lots of pressure from our president, the markets are anticipating that the rate will increase by a quarter of a point again. But you need to remember that this change doesn’t have a direct impact on mortgage rates.

What Could Affect Mortgage Rates

There is something that the market is really anticipating that could have an impact on mortgage rates: what does Powell say about the future increases that may be out there? After the announcement is made, Chairman Powell talks about what is next. If he is bullish about the markets, then it will generally be bad for mortgage interest rates. On the other hand, if he is bearish about the markets, then it is usually good for mortgage rates.

I’ll keep you updated, and you will be able to find the announcement over every news outlet as well. Remember: don’t panic about the announcement! If you have questions about your mortgage, then call me at Franklin Loan Center to learn more about your financing options.


Franklin Loan Center | NMLS 237653
Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, 4131316
http://www.nmlsconsumeraccess.org/entitydetails.aspx/COMPANY/237653
For questions or concerns please email info@franklinlc.com