6:49 a.m. Well… it’s kind of a live post – I will be updating this post throughout the day. This morning, all eyes are on the FOMC (aka “the Fed”) as we wait to learn how much the Fed funds Rate will be adjusted. It is anticipated that the Fed will push the rate 0.500% higher today. This will directly impact loans that are attached to the Prime interest rate, such as home equity loans and many credit cards with variable rates.

Mortgage interest rates are influenced by the actions the Fed takes today. Mortgage interest rates are based on mortgage-backed securities (bonds). So if the Fed decides to hike rates to 0.75% instead of the anticipated half point increase, we will most likely see interest rates spike as this indicates that inflation is not in control. However, if the Fed increases the rate by the highly anticipated half point (or less, which I don’t think will happen), we should see Mortgage Rates improve immediately as this is indicates that inflation is getting under control. Inflation drives mortgage rates higher since mortgage rates are based on bonds.

Fed Chair Powell will be letting us know around 11:00 am PST how much the Fed Funds Rate will be raised this time as their two-day FOMC meeting wraps up. It’s not only how much the Fed Funds interest rate is adjusted that people will be looking for, the commentary when the rate is released and follow up speech from Powell will also be dissected for data on inflation.

As I wrap up this installment of today’s live post (7:10 am), MBS (mortgage backed securities) are up 19 basis points from yesterday. Stay tuned!