Industry News

Upbeat Fed talk pulls mortgage rates down

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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 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, 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 hours after Yellen's speech, and long-term mortgage rates followed. In Freddie Mac's survey, the 30-year fixed-rate mortgage fell this week to an average 6.43 percent, down from last week w...