While the Federal Reserve chose not to raise the federal funds rate at its meeting this week, Chair Janet Yellen in her press conference on Wednesday made it clear a rate hike will happen later this year if the economy stays on its current track.

“Our decision does not reflect a lack of confidence in the economy,” she said after the Federal Open Market Committee meeting Wednesday. “Conditions in the labor market have strengthened and we expect that to continue, and while inflation remains low we expect it to rise to our 2 percent objective over time.”

Yellen told investors to expect an interest rate hike before the end of the year if trends continue. This would affect mortgage rates, bond prices and yields, and a number of other market prices.

I expect a small increase is now likely in December. Of course, factors that would delay a rate hike include more global economic shocks (like Brexit) or a sudden traumatic shock to our U.S. economy. If economic data stays on its current trend, rates will keep creeping higher.

Mortgage rates this week ticked down on average two basis points, according to Freddie Mac's survey.

The Fed's decision to not hike rates this month was somewhat controversial. Three members of the Open Market Committee dissented from the majority decision.

The reason? The Fed hasn't raised interest rates since December 2015, a slower pace than most investors anticipated at this time last year. The federal funds rate has remained at extremely low levels for more than seven years, even as the economy has gained strength. There is a group of economists and investors that believe such accommodative monetary policy should have been rolled back as the economy proved itself healthier and not doing so has now left central bankers with few tools to use should the economy at this point take a turn for the worse.

Nevertheless, the majority of the FOMC's members believe putting off a rate hike just a little bit longer is the safest move since inflation still hasn't reached the Fed's 2 percent target. All eyes now move to the committee's meetings in November and especially December.

Here's a brief review of the FOMC and why it's worth watching.

What does it do?

Unless there's an economic calamity brewing, few people keep their eyes on the Federal Open Market Committee (FOMC). But this group of bankers and economists has one of the most critical jobs within the Federal Reserve System — setting monetary policy.

The FOMC's moves to change the growth of the nation's money supply ripples across the economy, influencing both the availability of credit and the interest rates businesses and consumers pay.

How does it set policy?

The 19-member FOMC typically meets every six to eight weeks in Washington, D.C., to set a target for the federal funds rate that will ensure price stability and maximum sustainable growth for the economy.

Bank and board directors deliver reports on financial and foreign exchange markets and make economic forecasts before progressing into two "go-rounds."

In the first round, each of the seven Fed governors and 12 reserve bank presidents offer opinions on current economic and financial conditions in their districts and nationally. During the second "go-round," they make their case for certain policy options presented earlier in the meeting.

Once members cast their vote, the FOMC publicly announces its policy decision.

How does it put policy into action?

Now that a decision is final, the open market trading desk at the Federal Reserve Bank of New York either buys or sells U.S. securities on the open market to achieve the federal funds rate goal the FOMC established.

Purchasing securities will increase the amount of reserve funds available for banks to lend, putting downward pressure on the federal funds rate. Selling securities does the opposite, shrinking the reserve funds available and pushing up the funds rate.

This matters to me because…

The FOMC directly affects how much borrowers pay in interest, makes projections on inflation four times a year and ensures the integrity of the financial system. The committee's choices shape the trajectory of the nation's economic growth, and arm consumers with data that informs their personal economic decisions.