The Federal Reserve Bank cut policy rates to zero in its second surprise move of March 2020. This is in light of the economic issues being caused by the COVID-19 breakout and the Government creating an economic stimulus to help stem continued declines in the economy and markets. It is important to understand that the Fed does NOT control mortgage rates. Mortgage rates are dictated by the price of mortgage backed securities (MBS) and trade independently from both the Fed and the Treasury market. The major difference is someone investing in an MBS is accepting the potential rate of return on their investment for up to 30 years! That’s why mortgages don’t go down as quickly or as low as fed funds. The Fed announced several additional measures to make more money available for families and businesses. They will (hopefully) inject billions into the bond and mortgage-backed securities markets in an effort to lower costs to all Borrowers. They will allow banks to loan out money normally held in required reserves and they will make even more funds available to banks by extending the time banks can borrow discount funds. This has created huge potential demand in the mortgage markets that we are dealing with along with misperceived notions about how low mortgage rates are or can go. The news has had mixed reactions in the markets with further declines and continued volatility in stocks, bonds, and the continued "ups and downs" of mortgage rates.