Mortgage rates lag the Fed funds rate

A couple days ago there was a post on the blog about mortgage rates being the key to economic recovery, and if this is so then there is evidence that the Fed funds rate reductions are working. Mortgage rates are decreasing as are most rates across the board, however the mortgage rates are not adjusting as quickly as one would hope to the rate reductions at the Fed. If indeed, economic recovery lies with mortgage rates we will have to wait until they catch up.