For the third consecutive meeting, the Federal Open Market Committee left the Fed Funds Rate unchanged at 2.000 percent.

Of interest to mortgage rate shoppers, the FOMC led its press release with comments about the health of the financial and labor markets, calling them "strained" and "weakened", respectively.  The relative weakness in both of these areas has contributed to low mortgage rates of late.

The FOMC also noted in its release that, although economic growth has slowed this year, the historically-low 2.000% Fed Funds Rate should foster "moderate economic growth" in the future.

In the wake of the announcement, Wall Street is rallying.  Investors like what the Fed had to say and this is attracting money to the stock market at the expense of bonds. 

Mortgage rates have given up all of Monday's gains, and then some.

Source
Parsing the Fed Statement
The Wall Street Journal Online
September 16, 2008
http://online.wsj.com/internal/mdc/info-fedparse0809.html