As expected by many market observers, the Federal Open Market Committee raised its target federal funds rate Feb. 2. The 25 basis-point increase doesn't signify that any substantial changes are about to take place in the mortgage market, market observers say.

"My take is that the market is not responding to that at all, to me it's a ho-hum thing," said one mortgage-backed securities trader. "The only question was, would they go 50 basis points and be men about it? I think they wimped out, so we can revisit this again in March. I think they should have done 50 now. I think it was silly."

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