Although it appears that inflation is under control and the brakes are now being applied to the economy, it is expected that the Fed will in fact boost rates again on Tuesday.  However, the most attention will be fixated on the statement the Fed releases with the rate hike.  Investors will analyze the statement for any clues as to when the rate hikes will cease.  If Mr. Bernanke hints that this is the final rate hike expect rates to become extremely volatile.

We believe that while the Fed is likely to raise rates again on Tuesday it is unlikely that Mr. Bernanke will adjust the Fed’s statement to give us a hint of when the rate hikes will cease.  Therefore, if the economic news continues its trend of a slower economy in conjunction with a rate hike by the Fed it is very likely we will enjoy lower mortgage rates by week’s end.