As predicted, the Federal Reserve has just raised its benchmark Federal Funds rate, upping its target range by another 0.25 percent (25 basis points) and signaling expectations for three more quarter-point increases in 2018.

The Fed dropped the benchmark rate five (5) percentage points between August of 2007 and the end of 2008, a move which helped drive mortgage rates down to an all-time low of 3.31 percent in 2012. The Fed has since raised its target by a total of 1.25 percent.

Following the Fed’s announcement today, the yield on 10-year Treasury notes, which drives the 30-year mortgage rate, was little changed. And as of last week, the average rate for a 30-year mortgage was running around 3.94 percent with the probability of a rate hike this week already priced-in.

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