Today's FOMC meeting has adjourned with an announcement that there was not a change to key short-term interest rates. This was the second consecutive meeting with no change and was widely expected. The post-meeting statement indicated that the Fed was aware and considered the economic slowdown but also was quite concerned about the threat of inflation. That created concern in the bond market since inflation erodes the value of a bond's future fixed interest payments.

However, bonds have actually held up quite well during afternoon trading, at least so far. The stock markets have extended their earlier gains with the Dow up 275 points and the Nasdaq up 50 points. The bond market is near morning levels, so I am not expecting a change to mortgage rates unless bonds fall from current levels.

There was no relevant economic news posted this morning. Stock started the day off strong as oil prices continue to f all. High fuel costs have been noted by many sources as a contributing factor to the slowing economy. As oil prices fall well off their recent highs, that concern seems to be easing. This leads to better expectations for economic activity and corporate earnings.

There is no relevant economic data scheduled for release tomorrow. The next piece of news is Thursday's posting of weekly unemployment figures and those are not considered to be of high importance to the markets. This leaves the bond market to be influenced by stock and oil prices. If stocks continue to move higher, we may see bonds suffer and mortgage rates move higher until Friday's data is posted. If the major indexes begin to fall, bond could benefit and drive mortgage rates lower.