The Federal Reserve's rate-setting committee meets today and tomorrow. Around 2:15 p.m. eastern time tomorrow, the Fed will issue its latest rate policy statement, and it will move markets. The prudent thing to do is lock your mortgage rate before tomorrow afternoon.
It is quite possible that long-term interest rates will go down after the Fed announcement. But it's also possible that rates will rise. At times like this, when markets threaten volatility, I think it's best to take shelter by locking your mortgage rate if you can.
Most observers expect the Fed to announce another round of "quantitative easing," or purchases of billions of dollars' worth of bonds. The Fed's intent will be to force interest rates lower. But if the Fed's explanation is worded clumsily, it could spook investors, leading to a rise in rates, albeit temporary.
On Friday morning, we get another gust of volatility when the October employment report is released. The consensus prediction is that employment will rise marginally, by about 500 people per state, and that the unemployment rate will creep up a tenth of a percentage point, to 9.7 percent. If the report yields better results than that, a rise in mortgage rates is possible. I doubt that'll happen -- I'm bearish about employment -- but you can't rule out the possibility of an encouraging jobs report.