Mortgage rates dipped this week following San Francisco Federal Reserve Bank President Janet Yellen's words hinting of a decline in inflation, according to surveys conducted by Freddie Mac and Bankrate.com. Yellen spoke encouragingly Tuesday to the Emeryville, Calif., Chamber of Commerce, and said that she believes "it is critical that inflation trend in a downward direction over the medium term. Indeed, my expectation is that this is the most likely outcome." Mortgage rates are influenced by what the bond market thinks will happen to prices, according to Bankrate.com, and if bond traders believe inflation will rise, mortgage rates rise, too. If bond traders believe inflation will level off or fall, the same thing often happens to mortgage rates. Bond yields fluttered downward in the...
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