Mortgage rates dropped at the end of last week on the news that the Federal Reserve is unlikely to raise interest rates anytime very soon. There had been speculation that the Fed would try to put a cap on inflation by boosting interest rates as early as August, but that no longer appears to be the case. CNN Money reports on mortgage rates:

"Mortgage rates reversed their three-week rise, falling this week after the release of the latest Federal Reserve’s policy statement that it expects inflation to moderate later this year," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

While mortgage rates are not often directly affected by the Fed Funds Rate, it can have an indirect on mortgage rates, due to the sentiment and market conditions that can be created.