Today, in its first meeting in 6 weeks, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged.

Fed Funds Rate Held Near 0.000%

The Fed Fund Rate remains at a historical low, within a prescribed target range of 0.000-0.250 percent.

In its press release, the FOMC said that, since June, the pace of economic recovery “has slowed”. Household spending is increasing but remains restrained because of high levels of unemployment, falling home values, and restrictive credit.

Today’s statement shows less economic optimism as compared to the prior year’s worth of FOMC statements dating back to June 2009. The Fed is looking for growth to be “more modest in the near-term” than its previous expectations.

Fed Stays On Message; No New News On The Economy

Weaknesses aside, the Fed highlighted strengths in the economy, too:

1. Growth is ongoing on a national level
2. Inflation levels remain exceedingly low
3. Business spending is rising

As expected, the Fed re-affirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period”.

There were no surprises in the Fed’s statement so, as a result, the mortgage market’s reaction to the release has been neutral. Mortgage rates are unchanged this afternoon.

The FOMC’s next meeting is scheduled for September 21, 2010.

Join The Refi Boom Before Rates Rise

Mortgage rates are holding at all-time low levels. Regardless of how long you've owned your home, you may be eligible for a refinance. Talk to your loan officer about a rate quote, or . I'd be happy to get you pricing right away.

(Post adapted from Bring the Blog)

The Importance Of Language

Adjectives play an important role in the English language -- they modify nouns.  Because of adjectives, we can linguistically separate good movies from bad movies, rainy days from sunny days, and sore losers from lovable losers.

Sometimes, adjectives are superfluous.  For example, you know this is a mortgage blog so when yours truly writes "rates are lower", it's implied that I'm talking about mortgage rates. I don't need to constantly say "mortgage rates".

Other times, though, omitting adjectives leads to misunderstandings. It happens nearly every time the Federal Open Market Committee meets.

Here's why.

Explaining the FOMC In Layman Terms

The Federal Open Market Committee is a government group that makes monetary policy. It's job is akin to the gas-and-brake pedals on a car -- speed up or slow down the vehicle that is the U.S. economy.

The FOMC has 12 members and is headed by Chairman Ben Bernanke.

8 times annually, the Fed gets together to discuss a host of economic issues and, when the meeting is done, the members vote on whether to raise, lower, or leave unchanged an interest rate called the Fed Funds Rate.

The Fed Funds Rate is the prescribed interest rate at which banks lend money to each other overnight.

Simplified, when the Fed Funds Rate is high, banks end up paying a lot of money in interest payments and are less inclined to borrow from one another, thereby slowing down the economy. When the Fed Funds Rate is low, borrowing is cheap, and the economy is spurred forward.

Because the Fed Funds Rate is directly related to Prime Rate, the basis of business and consumer borrowing, the FOMC's vote carries huge implications for the economy as a whole.

The FOMC Does Not Vote On Mortgage Rates

The FOMC meets today and adjourns at 2:15 PM ET.  The group is expected to leave the Fed Funds Rate unchanged within its current range of 0.000-0.250 percent.  This is the lowest Fed Funds Rate is history and the Fed has said that the Fed Funds Rate will stay near zero for "an extended period".

However, by 2:30 PM, news stories will surface online about how the Fed voted to "leave rates unchanged" today.

And this brings us back to adjectives -- implied or otherwise.

See, the proper verbiage from the press would be "the Fed voted to leave the Fed Funds Rate unchanged today", but that's not how the headlines will be phrased.  They'll just say "rates".

This is a big deal only because most Americans don't know what the Federal Reserve's true scope is; they never learned what the Fed does for the country, or how it does it. It's the main reason why, in my experience, Americans tend to think that the Federal Reserve controls daily mortgage rates.

It doesn't. But... Because of this misconception, when Americans read about the FOMC and "rates", they just assume the story is about mortgage rates.

It's not.

Comparing The Fed Funds Rate To Mortgage Rates

The FOMC doesn't control mortgage rates.  If it did, the chart at top would be less staggered.

Going back 20 years to 1990, the relationship between the Fed Funds Rate and the 30-year fixed rate mortgage has been indirect, at best.  The spread in rates has been as narrow as 1 percent and as wide as 5 percent.  There was even a period in the 1970s and 1980s where the spread went negative; where mortgage rates were lower than the Fed Funds Rate.

And if you need to know the biggest reason why the Fed Funds Rate is untied from mortgage rates, it's because the Fed Funds Rate is an overnight rate and the 30-year fixed rate is a long-term rate.

Borrowing money is much different over 8 hours as compared to 263,000 hours.

Make A Mortgage Rate Lock Plan Ahead Of The FOMC

It's imprudent to float a mortgage rate ahead of an FOMC meeting. Despite the near-universal belief that the Fed Funds Rate won't be changed, there's always the chance that the Fed says something "good" for the economy, causing mortgage rates to spike.

It's happened in the past and it could happen again.

If you're shopping for a mortgage or otherwise not locked in, talk to your loan officer in advance of the Fed's 2:15 P.M. ET announcement. Rates may not rise, but then again, maybe they will. It stinks to be on the wrong side of that bet.

Or, if you don't have a loan officer, with your details and I'll lock your rate for you on the spot.

Wednesday, in its first meeting in 5 weeks, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged.

The Fed Fund Rate remains within its target range of 0.000-0.250 percent.

The Recovery "Is Proceeding"

In its press release, the FOMC said that, since April, "the economic recovery is proceeding" and that the jobs market "is improving gradually". Business spending "has risen significantly", too, with the exception of commercial real estate.

The June FOMC statement is the 8th straight press release in which the Fed shows optimism for the U.S. economy, dating back to June 2009.  Since last year, the Fed has terminated all of the programs it created to support the economy through the economic crisis.

Also, as expected, the Fed re-affirmed its plan to hold the Fed Funds Rate near zero percent "for an extended period", citing that "inflation has trended lower" recently.

The recession is widely believed to be over.

Despite Economic Growth, Threats Linger

And, although the Fed's June statement acknowledged economic growth, it highlighted lingering threats, too.

1. Employers remain reluctant to hire new workers
2. Household wealth (i.e. equity) is lower
3. Bank lending is contracting

Furthermore, the Fed wrote "Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad."

Translated : Europe concerns us.

That's a big deal for mortgage rate shoppers because as Europe has faltered financially and economically since, the U.S. mortgage market reaped the gains.  Mortgage rates are below the all-time lows of last year and poised to drop more.

Locking Rates : Strike While The Iron Is Hot

Mortgage rates are low and -- as many times as we say it -- they can't stay this low forever. They sure seem to, though, don't they?

It's just, I'm not one to mess with chance and maybe you're not, either. Call in that rate lock today, folks.

With 30-year fixed mortgage rates cutting 4.500 percent, it's not like an extra 1/8 percent dip will change your life going forward.  And I like the idea of a 4.500 rate over the next 30 years, though. How about you?

Lock your mortgage rate with a simple phone call to 513-443-2020, or, save time and just send me an email with your details. I'm happy to get your rate locked right away -- before rates creep back higher.

(Content adapted from Bring the Blog, a daily blog-writing service for mortgage and real estate salespersons)

The Federal Open Market Committee starts a 2-day meeting today and will vote to keep the Fed Funds Rate unchanged. Don't expect mortgage rates to stay unchanged, too, however.  The Fed Funds Rate and the 30-year fixed mortgage rate are two completely different animals.

Yet, people confuse them all the time. Here's what you need to know.

Conforming Mortgage Rates Are Made On Wall Street

The Federal Reserve controls two interest rates -- the Fed Funds Rate and the Discount Rate.  Both are "banking" rates.  Neither is a consumer rate.

When the Federal Reserve makes a vote on the Fed Funds Rate, it's voting on the rate at which banks borrow from each other. The Federal Reserve is not voting to change consumer mortgage rates because, based on its government charter, it can't.

Therefore, if you're looking for somebody to tell you where mortgage rates will go, don't look to the Fed.  Look to Wall Street instead. Mortgage rates are the by-product of mortgage-backed bonds and their respective prices. The Federal Reserve has nothing to do with it.

If the Fed controlled mortgage rates using the Fed Funds Rate, the interest rate spread between the two would be liner.

Clearly, it's not.

Ben Bernanke Influences The Mortgage Market

Now, all of that said, the Fed is not without influence on mortgage rates.  This is because the Federal Reserve is our nation's Central Banker and its policies set the tone for the equities markets.

For example, when the Federal Reserve makes positive comments about the economy, the stock market tends to gain and those gains come at the expense of bonds.  Similarly, when the Fed is down on the economy, stock markets often sell off and bond markets get the benefit.

Simplified:

• Rates rise when the Fed is unexpectedly positive on the economy
• Rates fall when the Fed is unexpectedly negative on the economy

This is why it doesn't matter how the Fed votes tomorrow.  It'll be the group's post-meeting press release that sets the tone for mortgage rates.

It's imprudent to float a mortgage rate ahead of a FOMC meeting.

Call In Your Rate Lock ASAP

If you're shopping for a mortgage or otherwise not locked in, talk to your loan officer in advance of the Fed's 2:15 P.M. ET announcement tomorrow. Rates are more likely to rise than to fall.

Or, if you don't have a loan officer, with your details. I'm happy to get your rate locked right away -- before rates change for the worse.

Looking to lock a mortgage rate? I'm a contributor to the Bankrate.com Mortgage Rate Trend Index and this week's survey should give you guidance.

Conforming Mortgage Rate Forecast Only

By way of disclosure, the Bankrate.com survey is for conventional, conforming mortgages only. It does not apply to FHA streamline refinances nor is the survey specific to mortgage rates in Cincinnati or Philadelphia, for example. Furthermore, unique property types including non-warrantable condos in Chicago, condotels in Florida, and the 5-10 Properties program may be excluded.

for a real-time rate quote.

Breaking Down The Predictions

Here's the survey panel's mortgage rate predictions:

• 35% predict mortgage rates will increase
• 0% predict mortgage rates will decrease
• 65% predict mortgage rates will remain unchanged

I expect mortgage rates to remain unchanged.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent watching this hastily made tourism video for Cleveland.

Either way, here's what I told Bankrate.com:

"With the Fed meeting next week, markets move to wait-and-see mode."

It's all quiet on the Wall Street front until next Wednesday.

The Federal Reserve Meets Next Week

The Federal Open Market Committee begins a scheduled 2-day meeting next Tuesday.  It's one of 8 meetings for the year and there's absolutely no expectation for the Fed to raise the Fed Funds Rate.

That doesn't mean mortgage rates won't change, however.

The Federal Reserve is the nation's Central Banker, setting monetary policy for the banks and business, and, ultimately, that policy trickles down to consumers in the form of Cost of Living adjustments, credit card borrowing rates, and mortgage rates.

Since December 2008, the Fed has kept the Fed Funds Rate in a target range of near 0.000 percent.  In doing so, it's helped stimulate the economy and, on record, the recession that the Fed's move was meant to lessen, did actually end at some point mid-2009.

Why Rates Won't Move Until Bernanke Has Spoken

Although the Fed won't raise the Fed Funds Rate, it can still make a big impact with its post-meeting press release.  The press release highlights the strengths, weaknesses and threats to the economy as seen by the Federal Reserve.

Lately, economic data is conflicting.  Jobs look strong, then weak.  Inflation looks weak, then strong. Manufacturing is all over the map.  And that's just here at home.

Globally, there's nations in massive debt and reeling.  And there's others that are moving to constrain their growth.

For safety, Wall Street is squaring is bets in advance of the Fed's meeting. There won't be much activity between now and Wednesday.

I think.

Recommendation : Float Cautiously

Despite the next half-week's lull, don't turn your back on the market for a second.

One of the hallmarks of mortgage markets is its propensity to change rapidly, and without notice. We've seen it more than a few times already this year and Mortgage Rate Velocity remains extremely high.

Unless you're shopping for a jumbo mortgage, or in need of an interest mortgage, there's very little reason to lock.  Conforming rates should stay calm.  Use the "downtime" to get your mortgage application into a loan officer because once the Fed does adjourn, rates should move quickly.

Applications-by-phone are a 4-minute process. To give one, call my office at 513-443-2020 or .

Today, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged within in its current target range of 0.000-0.250 percent.

Jobs Are Beginning To Improve

In its press release, the FOMC noted that, since March, the U.S. economy "has continued to strengthen" and that the jobs markets "is beginning to improve".

This is a step up from the last meeting after which the Fed said jobs were "stabilizing".

Today's statement marks the 7th straight press release in which the Fed shows optimism for the U.S. economy.

Furthermore, the Fed has now closed all but one of the programs it created to support markets during last year's financial crisis.  This includes the Fed's MBS Purchase Program.

Economic Threats And Questions Remain

Threats remain to growth, however. The Fed fingered a few:

1. Employers are reluctant to hire new workers
2. High unemployment threatens consumer spending
3. Consumer credit (still) remains tight

Also in its statement, the Fed re-acknowledged its plan to hold the Fed Funds Rate near zero percent "for an extended period".  This was expected.

Overall, the statement's tone was positive and the Fed noted that inflation is within tolerance.

Mortgage Rate Movement Is Neutral Post-Fed

Mortgage market reaction has been muted thus far. Conforming and FHA mortgage rates in Cincinnati are unchanged post-FOMC.  Jumbo and super-jumbo loans are the same as well.

The FOMC’s next scheduled meeting is a 2-day affair, June 22-23, 2010.

The 55-day span between meetings will be the FOMC's longest of 2010.  A lot can happen in 55 days so if the economy takes off in one direction or the other, don't be surprised to see the Fed call an emergency meeting. It called 3 such meetings last year.

(Post licensed from Bring the Blog, a blog-writing service for loan officers and real estate professionals)

Mortgage markets improved yesterday after the Federal Reserve released its March 16, 2010 meeting minutes. It's good news for Cincinnati home buyers and rate shoppers -- rates could have just as easily gone the other way.

The Meaning Of The Fed Minutes

The Fed Minutes is a detailed recap of the debate and discussion that shapes the nation's monetary policy. The notes are dense; it takes 3 weeks to compile them for publication.

As compared to its more well-known, post-meeting press release cousin, the Fed Minutes are extremely lengthy. In word counts:

• March 16 press release : 451 words
• March 16 meeting minutes : 6,152 words

If the press release is the executive summary, in other words, the Fed Minutes are the novel.

A Not-So-Hidden Message On Inflation

The extra words matter.The minutes recount what the Fed did, how the Fed did it, and what the Fed plans to do next. And, in the minutes, Wall Street looks for clues.

This is why the report is important to every rate shopper in the country.

When the Federal Reserve publishes the minutes from its meetings, it leave clues about the groups next policy-making steps.  For example, in March's Fed Minutes, it's clear that the Fed's concern about inflation is hugely diminished and that's a major plus for the mortgage bond market.

Inflation causes mortgage rates to rise. The absence of inflation, therefore, helps them to fall.  This improves home affordability, among other things.

The Fed Explains Why Home Sales Are Strong

Similarly, the Fed Minutes note that real estate sales may have been worse throughout the winter months if not for low mortgage rates and the sense among Americans that home prices were troughing. We may infer, therefore, that rising rates may suppress home sales later this year.

Markets are always looking for clues from inside the Fed and the last meeting's minute signal that the economy is on its way up.  If you're looking for a bargain in the housing market, your window to act may be closing.

Going under contract for home this week or this month? to send me an email and get a competitive rate quote.

(Post licensed and reprinted with permission from Bring the Blog)

My longtime readers are familiar with the proverbial Mortgage Rate Roller Coaster. It's my way of explaining how mortgage rates rarely move in a straight line.  Some days up, some days down, every day unpredictable.

See for yourself how volatile rates can be.

Mortgage Rates Can Make You Nauseous

In this true-to-life mapping, ride the coaster as it plots the Fannie Mae 5.0% bond against a wooden-frame rail track, beginning on November 25, 2008 and ending March 31, 2010.  This period represents the time during which the U.S. government spent $1.25 trillion to keep mortgage rates low.

During that period, conforming 30-year fixed rates carved out a range of 1.75 percent and changed up to 5 times per day.

The Fed's Buyback Program Worked (For Now)

Insiders estimate the Fed's program lowered mortgage rates 1 percent. Other factors may have helped them fall more. Rates peaked in June 2009 and bottomed in November 2009. Today, 30-year fixed conforming rates are approximately 1.125 percent lower than when the mortgage buyback program started.  ARMs are even more improved.

The Mortgage Rate Roller Coaster is 100% built-to-scale.

You Should Know When To Lock Your Rate

I'm an active loan officer and I am licensed to lend in the majority of the United States. If you have questions about mortgage rates, mortgage rate volatility, or timing your upcoming rate lock, to send me an email.

I answer all my mail and look forward to helping you.

Today, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged, in its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that the U.S. economy "has continued to strengthen" and that the jobs markets "is stabilizing".  It also said that business spending has "has risen significantly".

This is a slight departure from the Fed's January statement in which housing was not mentioned at all, and business spending was said to be "picking up".

The change is notable, even if barely detectable.

Today's statement also marks the 6th straight session after which the Fed described the economy with optimism.  The 2008-2009 recession is over and that growth is returning to Ohio and the U.S., in general.

The economy is not without threats, however, and the Fed identified several:

1. High unemployment threatens consumer spending
2. Housing starts are at a "depressed level"
3. Consumer credit remains tight

The message’s overall tone, however, remained positive and inflation remains within tolerance limits.

Lastly, the Fed confirmed its plan to end its $1.25 trillion mortgage markets commitment in March 31, 2010. Fed insiders estimate that the bond-buying program lowered mortgage rates by 1 percent since its start. Rates should rise once the program expires.

Mortgage market reaction is muted to the Fed's press release. Mortgage rates are unchanged this afternoon.

The FOMC’s next scheduled meeting is a 2-day affair, April 27-28, 2010.

(Content supplied by Bring the Blog)

Need a mortgage rate prediction? I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey may help you.

Conventional, Conforming Mortgage Rates

By way of disclosure, the Bankrate.com survey is for conventional, conforming mortgages only. It does not apply to FHA mortgages or jumbo mortgages. Nor is the survey specific to Cincinnati or Chicago mortgage rates. Furthermore, unique property types including non-warrantable condos and condotels may be excluded.

for a real-time rate quote.

Breaking Down The Predictions

Here's the group's mortgage rates predictions:

• 43% predict mortgage rates will increase
• 0% predict mortgage rates will decrease
• 57% predict mortgage rates will remain unchanged

I expect mortgage rates to increase.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent watching the only working mousetrap ever made than reading my analysis.

Either way, here's what I told Bankrate.com:

"Markets adjust to Life After Fed Intervention."

We can say it a thousand times and it would still be a thousand times too few -- the Federal Reserve is withdrawing its mortgage market support March 31, 2010.  Indeed, the Fed's barely a player even now as its intervention winds down to nothing.

Last week, it bought just $11 billion worth. And here's why it matters.

The Biggest Bond Buyer Is Going Bye-Bye

Since the end of 2008, the Federal Reserve has been the biggest open-market purchaser of mortgage bonds and the net impact of that intervention is lower mortgage rates by 1 percent. In other words, mortgage rates are 5 percent right now. They'd be 6 percent without the Fed.

"Without the Fed" starts in 27 days.

Mortgage rates have been low lately, and falling. It's unexpected.  Also, it's easy to get lulled into thinking that rates are down because markets are shrugging off the Fed's deadline.  Don't make that mistake.

Mortgage rates are lower for a few reasons, all of which increase demand for U.S. mortgage bonds.  More demand mean higher bonds prices and, therefore, lower mortgage rates.

1. Greece is having debt issues, pushing investors to buy "safe" securities like bonds
2. Economic growth is steady, but precariously balanced. Without clarity, investors seek safety.
3. Rumors that the Fed (or another agency) will extend the program beyond its original expiration date.

Don't expect these conditions to last.

They've been lucky so far but, pretty soon, mortgage rate shoppers are soon to face the music. You don't want to be on the wrong side of this bet. Rate jumps will be fast and fierce.

Rate Hikes Will Be Fast And Fierce

If you need a rate lock, take your chips off the table and get it done.

That said, locking mortgages is a timing game and you'll still want some help to get it right. On some days, rates will over-react higher, and on other days, they'll retreat.  You're going to want your loan officer to offer some coaching.  Call "your guy" or, if it's easier for you, with your situation.

I handle all of my own mail and I would love to get you a good rate. It's what I do best.

Plus, my bank has good, low mortgage rates. Just ask me about it.

Science experiments can be excellent metaphors at times.

Thursday, shortly after the markets closed, the Federal Reserve announced a 25 basis point increase to the Discount Rate.  The Discount Rate is now 0.750%. Mortgage markets are selling off on the news.

The Era of Low Mortgage Rates may be officially over.

The Psychological Impact Of The Discount Rate

For some context, it's important to understand what the Fed's Discount Rate is and, more specifically, what it isn't.

The Discount Rate is the interest rate that the Federal Reserve charges to banks when banks borrow money from it. Banks typically borrow money from the Fed to beef up their cash reserves because all banks are required to keep as minimum level of cash-on-hand.

The Discount Rate is not the rate at which banks borrow money from each other -- that's the Fed Funds Rate.  Nor is the Discount Rate the benchmark rate at which banks lend money to consumers and businesses -- that's Prime Rate.

Discount Rate is just one of the Fed's many tools to slow or speed the economy and, as of yesterday, it's taking steps to slow growth down.  Or, at least, push some responsibility back to banks.  There's no direct impact on consumers for a move like this, but it's the indirect impact we need to worry about.

In raising the Discount Rate, the Fed implies that the U.S. is strong enough to withstand a shock.  It's the signal for which Wall Street has been waiting.

Mortgage Rates Are Breaking Higher

See, since late-2008, 30-year fixed mortgage rates have moved within a very tight range. With few exceptions, never more than 5.375% and never less than 4.875%.   This was because the bond markets harbored doubt about whether the "green shoots" of the economy were for real. Yesterday, the Fed answered that "Are We?" and "Aren't We?" question.

Clearly, we are.  And that brings us to the science experiment.

Much like a super-saturated solution, the mortgage-backed bond market has been in precarious balance, one crystal away from complete transformation.  Well, Thursday, February 18, 2010, the Fed introduced that crystal.  Loan officers everywhere will forever remember yesterday as the Last Day of Low Mortgage Rates.

What To Expect From Your Loan Officer

The Federal Reserve won't make policy changes over the next few weeks, months, or maybe even quarters, but the damage is done. Bond markets are played 12-18 months into the future and the Fed's move to raise the Discount Rate has traders to change their expectations what's coming down the pipe.

Mortgage rates will rise in response.

If you're in the process of shopping for a mortgage or buying a home, the longer you wait to commit, the higher your mortgage rate will likely be.  Call or and I will send you a rate quote based on what the market is doing today.

Rates are changing very quickly and every day counts.

Need a mortgage rate prediction? I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey may help you.

The Bankrate.com survey is for conventional, conforming mortgages only. It does not apply to FHA mortgages or jumbo mortgages. Nor is the survey specific to Cincinnati or Chicago.

for a real-time rate quote.

Here's the group's mortgage rates predictions:

• 50% predict mortgage rates will increase
• 29% predict mortgage rates will decrease
• 21% predict mortgage rates will remain unchanged

I expect mortgage rates to increase.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent learning how to suck at Facebook than reading my analysis.

Either way, here's what I told Bankrate.com:

"The reality of the Fed's mortgage market withdrawal sets in this week."

This is going to read like a recap from last week, but let's review the highlights.

When the economy hit the skids in September 2008, the government made a massive intervention.  In addition to formal stimulus from Congress, the Federal Reserve did what it could to loosen up the credit markets.

One of the Fed's most well-known programs was its commitment to buy $1.25 trillion in mortgage-backed bonds in the open market. Internal studies from the Fed say the program lowered rates by 1 percent last year.

The program ends March 31, 2010.

Now, logic dictates that if the Fed's presence had rates down 1.000 percent in 2009 -- all things equal -- the Fed's absence will have rates up by the same 1.000 percent in 2010. The question remains, "how soon until it happens?"

The Fed has been weaning markets off the program, dropping purchases to just one-third of its March 2009 peak purchase levels. And while it's been doing that, there's been fewer originations to create new supply.

For this reason, some analysts think fears of a Fed pullout are overblown; that rates won't rise by a full percent. And that viewpoint may ultimately be proved correct.

For now, though, the prudent thing to do is to treat the situation like NFL referees treat an instant replay request -- stick with the original call until you've got sufficient evidence to overturn it. Right now, that evidence doesn't exist. It won't exist until April.

Naturally, you don't have until April.  You need to know what to do right now so here it is.

Get locked.

Mortgage rates have receded from December's highs and have been sitting in a pocket for about a week. At some point, Wall Street will start pricing bond for the Fed's MBS exit and you don't want to be on the wrong side of that window.

Locking mortgages is a game of timing and, for that, you may need some help.

If you don't have a loan officer you can call up for advice, know that you can always call me. Or, , whichever is easier. I handle all of my own email and I would happy to get your mortgage rate lock ready for you. The key is to be ready before the market changes and that's what I do best.

Also, my bank has good, low rates. Just ask me about it.

Recapping the FOMC statement from January 27, 2010 and what it means for mortgage rates.

Mortgage rates are notoriously volatile when the Federal Open Market Committee meets and today is such a day.  Today's meeting is one of  this year.

The Federal Open Market Committee is a rotating, 12-member sub-group within the Federal Reserve that debates about financial and economic conditions around the county, and votes on new policies meant to spur, steady, or slow economic growth.

The FOMC's economic toolbox is big, filled with programs and policies that most laypersons have never heard of, or even thought of.  The group's most well-known tool, though, also happens to be its most wielded -- the Federal Funds Rate.

The Fed Funds Rate is the rate at which banks borrow from each other overnight.  The lower the rate, the less banks pay in interest costs, and the more money is available for lending. 

It's in this way that the Fed Funds Rate impacts the economy.  When it's down, banks tend to lend more money, giving the economy room to grow.  And, conversely, when it's up, banks tend to lend less, constricting economic expansion.  This is one reason why FOMC meetings are such big news -- the Federal Reserve has a direct impact on the future of the U.S. economy.

The FOMC is expected with 100% certainty to vote the Fed Funds Rate unchanged from its current 0.000-0.250% target range at today's meeting.  Therefore, it won't be what the FOMC does that matters to mortgage rates. It will be what the FOMC says.

With the economy flopping between growth and recession, and with the Fed pledging to keep the Fed Funds Rate low for as long as necessary, markets will break down the FOMC press release for clues about what's in store economically for late-2009 and 2010.  As one example, if inflation is singled out as a threat, mortgage rates should rise because inflation erodes the value of mortgage bond repayments.

Given the current environment of low mortgage rates -- whether you live in Hyde Park, Cincinnati or Hyde Park, Chicago -- there's definitely more chance of mortgage rates rising this afternoon than falling.  There's only so much lower rates can go, you have to believe.

The Fed's press release hits the wires at 2:15 PM ET today.  If you're the cautious type, consider locking your rate prior to the release.