I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available.

The Bankrate.com survey is for conforming mortgages.  It does not apply to FHA mortgages, VA mortgages, jumbo mortgages, or foreign national mortgages.  For rate quotes, . .

The group's 30-day prediction for mortgage rates:

• 6% predict mortgage rates will increase
• 51% predict mortgage rates will decrease
• 41% predict mortgage rates will remain unchanged

I am predicting that rates will increase over the next 30 days. My prediction may not be appropriate for your individual situation and it may be wrong, too. And this week, the cheese stands alone.

Here's what I told Bankrate.com:

"Once the knee-jerk reaction ends, mortgage markets will settle down."

Wednesday, the Federal Reserve pledged another $750 billion to the mortgage markets.  That bring its total mortgage market commitment to $1,250,000,000,000.  In buying massive amounts of mortgage bonds like this, the Fed creates demand-side pressure that causes mortgage bond prices to rise. 

It's the same effect that a large buyer would have in any market, of course, and because mortgage rates move opposite mortgage bond prices, rates predictably fell yesterday.

By the time the market closed, conforming mortgage rates off by about 3/8 percent.  FHA rates were down about a quarter.  It was about then that the press started to predict 4 percent mortgage rates.  Mortgage lenders the world-over gave a collective Aunt Linda-like eye roll because we know it ain't happening.

Look, folks.  We've seen this pattern over and over again.  And 3 times in the past 10 weeks.  When the Fed makes an announcement in support of mortgage markets, bond traders' first reaction is to buy everything in sight.  That's why rates fall right away.

Then, after the first batch of trades, mortgage rates reverse for two reasons:

1. Traders take some profits off the table by selling bonds
2. Markets begin to question the Fed's role in future inflation

It's the second point that's most important to mortgage rate shoppers.  Inflation is the enemy of mortgage rates and with each subsequent Fed intervention, the risk of future inflation grows.  The Fed knows this and does not care.  In fact, what's most likely is that the Fed is making new policy to purposefully induce inflation because it's easier to manage than disinflation. 

Chairman Bernanke is Great Depression expert, you'll remember, and has been quoted several times as saying what made the depression "great" was that banks did too little -- not too much.

Bernanke is determined to follow a different path and that is terrible for mortgage rates.  Maybe not today, but some day.  And it'll happen before the economy starts to recover.  Mortgage markets discount future economic activity. Therefore, if traders believe inflation is coming 4, 8, 15, 16, 23, or 42 months down the road, they'll start to bid down mortgage bonds today, causing rates to rise.

Inflation will happen and when markets start trading on it, seek shelter.  Literally.  Because buying a home in a rising interest rate environment is not nearly as fun as buying when rates are falling.

So here's the recommendation.  If you're wondering whether "now" is a good time to lock your loan or start a refinance to lower rates, consider that mortgage pricing is already off its FOMC-led lows.  Get locked, I'd say. At least you can stop worrying about it.  If it turns out I'm wrong, you can always refinance later this year to 3 percent, right?

Meanwhile, rates move quickly and I use Twitter to transmit real-time changes in the mortgage market.  Come watch my feed at http://www.twitter.com/mortgagereports. I post several updates each day.  And If you do join, let me know you're watching by sending me a tweet.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.