The Federal Reserve Announces Rates Will Hold Steady

U.S. stock benchmarks retained a sharp decline Wednesday afternoon after the Federal Reserve held monetary policy steady while noting that the sectors of the economy that have already been damaged by the coronavirus pandemic are experiencing another round of pain. The Dow Jones Industrial Average DJIA, -2.05% was trading 1.4% lower at 30,499, the S&P 500 index SPX, -2.57% was down 1.7% at 3,785, while the Nasdaq Composite Index COMP, -2.61% was off 1.2% at 13,475. The Fed in its statement said that the "pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic." The Fed's policy update comes as investors are worried about the pace of the recovery from COVID-19, with investors training their attention to pockets of bubbliciousness on Wall Street, including trading in stocks like GameStop GME, +134.84%, which are being viewed as indicative of the frothiness persistent in the market amid superlow interest rates and trillions in Fed liquidity. Still, Fed Chairman Jerome Powell has stressed repeatedly it is premature for the U.S. central bank to contemplate exiting its accommodative monetary policy stance. Powell is expected to hold a news conference to discuss policy with reporters at 2:30 p.m. Eastern. The Fed is expected to field questions about GameStop as a matter of potential spillover or systemic risk.

The Federal Funds Rate is staying the same at 0 to .25%.  The Fed's interest rate decision doesn't directly affect mortgage rates, but today's rates remain historically low.