What Will The Fed Do To Mortgage Rates?

Wednesday afternoon brings one of the year’s 8 regularly scheduled policy updates from the Federal Reserve (aka, the Fed).  While there’s no question that Fed policies have significant impacts on all kinds of interest rates, the Fed doesn’t actually “set” mortgage rates.  The only limited exception would be for certain lines of credit that adjust based on the PRIME rate which, in turn, is based on the Fed Funds Rate (the thing the Fed actually DOES “set”).  Even if the Fed Funds Rate had a direct bearing on mortgage rates (it doesn’t), there’s no chance that they’ll announce a rate hike this week, let alone this year.

So why do we care about the Fed?  Why have we seen such big moves in mortgage rates after certain Fed announcements in the past?