Most people are aware that there is a government body that acts as a guardian over the economy but may not be quite sure how or why. The Federal Reserve is headed by Board of Governors. The seven members of the Board are appointed by the president, subject to confirmation by the Senate. The Federal Reserve Board known as the FED is an independant entity but is over seen by congress. The board sets Fed policy regarding the discount rate and reserve requirements (among other key economic decisions) and before the FED was created in 1913 the markets were often unstable.

Alan Greenspan has been the Chairman of the Federal Reserve board since August 1987.

The funds rate is currently increasing to hedge against inflation in property values.

Recently, the subprime market and adjustble rate mortgage rates have been most effected.

It is somewhat of a myth that changes in the fed funds rate by the Federal Reserve will have an imediate imapact on mortgage rates.

The fed funds rate is a very short term rate and ususally does not directly affect long term instruments such as mortgages.