Source: Mortgage News Daily —
Some quick housekeeping before we dig into the headline: mortgage rates are slightly higher so far this week. The increases were in place on Monday. Tuesday started stronger, but most lenders pulled back to Monday’s levels after bonds lost ground throughout the day. Bond prices/yields are the most important input for mortgage rates.
With that in mind, we’re even more equipped to talk about the Fed announcement tomorrow. There’s a common misconception that the Fed “sets” (or hikes/cuts) mortgage rates directly. Even among people who know better, there is often a belief that changes in the Fed Funds Rate (the thing the Fed actually hikes/cuts) translate in some direct way to changes in mortgage rates.