Market observers are no longer questioning whether the Federal Open Market Committee will raise short-term interest rates when it meets this Tuesday, but by how much. Many are predicting a 50 basis-point hike in rates, and may have already factored that into the market, economists say.

That was just one of the topics discussed by Mortgage Bankers Association chief economist Doug Duncan at the National Secondary Market Conference in San Diego, Calif. last week. He indicated that there is a "better than 50-50" chance of the Fed raising rates by 50 basis points and that the MBA has already factored it into its forecasts.

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