Today at 2:15 EST the FED will release the decision from its December meeting.  A drop in the Federal Funds Rate from 1% to .50% is expected, but they could drop it to .25%.  As you continue to see news about this historic rate drop, it is important to remember that the Federal Funds Rate and Mortgage Rates are not directly tied to each other.  In fact, the immediate response for mortgage rates is often negative after a rate drop from the FED.

At the time of this post, mortgage bonds are trading slightly higher, but relatively flat.  This is likely being held in check by the FED decision due out this afternoon.  Based on economic news out today, mortgage bonds would normally be trading sharply higher.

Consumer prices fell by the highest number on record, and it is the second month in a row that they have fallen significantly.  Housing starts are down by the lowest level since recording of the informatiion began in 1959.

All this information is the equivalent of shaking up a champaign bottle, and the results of the FED meeting is the cork.  Brace yourself for volililty in the market this afternoon.  If you have a mortgage loan in process, be prepared to lock your rate if things heat up.