The Fed spoke today and Wall Street is paying attention.  Over the past several days, the Dow, S&P 500 and NASDAQ shed hard-to-garner gains in anticipation of comments made at the conclusion of the FOMC meetings. In spite of regular, positive economic news, especially in the labor markets,fed looks to raise rates soon stocks as well as bonds have been losing ground.

All through fear of an earlier than expected rate increase by the Fed or changing the tenor of the statement and removing the now infamous “patient” moniker. At the past two FOMC meetings as well as Fed Chair Janet Yellen’s recent comments to Congress, it was made clear that the Fed would remain patient as it followed the economy, mainly employment and inflation.

Pundits and prognosticators alike have been all over the map on this one. Some are predicting no rate increases at all this year while others see a rate increase almost imminent, as early as this summer. Few expected the Fed to raise the Fed funds rate today but perhaps at the June round of meetings. And in fact, the Fed did remove the word “patient” from its March comments and markets are reacting. Positively, this time. Earlier in the day, the Dow fell by more than 100 points but immediately after the announcement, stocks reversed course back into positive territory. This time around, at least at first glance, investors are seeing rate increases as an indication of a growing economy and not afraid of higher rates. They certainly can’t go any lower, as the Fed funds rate is sitting at 0.12 percent.

Mortgage backed securities on the other hand have seen prices fall and rates rise over the past several weeks. The benchmark FNMA30yr3.0 coupon remained flat prior to the Fed announcement at 101.11 and rose slightly to 101.17, a tiny improvement. 30 year mortgage rates for real estate investors are now readily available around 4.00 percent. For a 30 year investor mortgage at $200,000, one-half percent difference in the rate results in a $28 dollar change in payment.

Eyes are now on the June FOMC meetings and with another positive jobs report for March and April as well as a little uptick in retail prices for goods and services, the Fed just might raise the Fed funds rate for the first time in nearly nine years.