As was widely expected, the Federal Reserve held rates steady today.  Mortgage rates were also generally steady, but the two have little to do with one another. Because the Fed was almost certain to “pause” its rate hike campaign today, the pause didn’t have a material impact on the bond market. The Fed Funds Rate is an ultra-short-term rate that applies to interbank borrowing on an overnight basis.  Mortgage rates, on the other hand, are determined by bonds that last an average of several years at the very least, and up to 30 years in some cases.   Longer term rates and shorter term rates often do different things.  Today is a decent enough example with 2 year Treasury yields rising 0.015% and 10yr Treasury yields falling 0.037%.  This wasn’t destined to be the case right at the time of the Fed announcement, however, because the Fed’s dot plot (a chart released 4 times a year that shows the Fed’s best guess at the path of the Fed Funds Rate in the coming years) suggested the median view is that two more rate hikes will be needed this year. The upgraded dots spooked the bond market briefly.  30 minutes later in the regularly scheduled press conference, Fed Chair Powell reminded the market that the dots are simply a best guess on how Fed members think conditions will unfold.  If conditions don’t unfold that way, there wouldn’t be two more hikes.  Moreover, Powell explicitly stated that nothing has been decided about future meetings and the word “skip” is not the right way to refer to today’s absence of a rate hike.