Juan: This is a bit of a delayed response to this 2007 question, but I here this question asked routinely. It is worth discussing. I love this question.
First, the RATE the FED cuts or increases IS the Federal Funds Rate. This is the rate that depository institutions banks charge other depository institutions for overnight lending (to be sure their 10% reserve requirement has been met). It is NOT the interest rate on mortgage loans â€“ see LINK: http://tinyurl.com/23prtb
Second, the FED (FOMC) has 8 â€œscheduledâ€ meetings yearly. Unscheduled meetings occur when all hell breaks loose in the economy or for â€œbetter timingâ€ purposes.
Third, the FEDâ€™s upward and downward adjustments in the Federal Reserve Rate do NOT mean mortgage rates will follow. They are NOT related. But, money rate fluctuations do impact the banking industry. With time, there MAY be an increase or decrease in mortgage rates â€“ or the opposite effect (if the availability of federal reserve funds stimulates inflation. See LINK: http://tinyurl.com/6db33k
The Federal Reserve Board members think they have their hands on the pulse of the economy, but there are no guarantees. So if one is considering LOCKING LOAN rates based on Federal Funds Rate activity, you may want to check with your bank and keep up with what the pendants in finance are saying. Their guess may be better than yours. Basnkrate.com is a good website to monitor this issue. I really like their Mortgage Rate Trend Index -- see LINK below.