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Adjectives play an important role in the English language.  They modify nouns.  Because of adjectives, we can linguistically separate good movies from bad movies, rainy days from sunny days, and sore losers from lovable losers.

Sometimes, adjectives can be superfluous.  For example, this is a mortgage blog. When I write "rates are lower", it's implied that I'm talking about mortgage rates.

In some cases, though, omitting adjectives can lead to dangerous misunderstandings.  One of the most common examples in the Mortgage World recurs each time the Federal Open Market Committee adjourns.

The FOMC meets at least eight times annually and, at each meeting, the Fed votes to raise, lower, or leave unchanged the Fed Funds Rate.  The vote has huge implications for the U.S. economy and often makes worldwide news.

Unfortunately,  when reporting on the FOMC's decision, press members often fail to include the leading adjective.  They'll say something like, "The Fed voted to raise rates today" instead of "The Fed voted to raise the Fed Funds target rate today".

It's an important distinction because most Americans never learned about the scope of the Federal Reserve's control; they don't know how the Fed influences banking.

Furthermore, because Americans tend to believe that the Federal Reserve controls mortgage rates, when people hear that "rates were raised", they assume it to mean that mortgage rates were raised, too.

Mortgage rates and the Fed Funds Rate don't move in tandem.  The chart proves it.

Since 2000, the spread between the Fed Funds Rate and the 30-year fixed rate mortgage has been as narrow as 1 percent and as wide as 5 percent -- hardly a direct relationship.  There was even a period in the 1970s and 1980s where the spread was negative; where mortgage rates were lower than the Fed Funds Rate.

One reason why the two rates move semi-independently is that the Fed Funds Rate is an overnight rate and the 30-year fixed rate is a long-term rate.  Borrowing and lending is much less risky over an 8-hour period versus a 263,000-hour period.

Last week, the Federal Open Market Committee voted to hold its benchmark lending target rate between 0.000 percent and 0.250 percent.  Mortgage rates fell on the news.

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:

• 31% predict mortgage rates will increase
• 31% predict mortgage rates will decrease
• 36% predict mortgage rates will remain unchanged

I am predicting that rates will decrease over the next 30 days. My prediction may not be appropriate for your individual situation and it may be wrong, too.

Here's what I told Bankrate.com:

"The U.S. has established itself as the best of the world's worst economies. The dollar gains, mortgage rates fall."

The U.S. Dollar plays a large role in setting mortgage rates for Americans. It's not an obvious connection because most people don't know what sets mortgage rates in the first place.  In one sentence, mortgage rates are "made" from the price of mortgage bonds using a mathematical formula.

The way that a mortgage bond works is that an investor buys the security and the receives interest payments at a regular rate over a period of time. Those payments are made in U.S. Dollars.  And this is why mortgage rates are closely tied to the fate of the dollar.

If the U.S. Dollar loses value versus the world's currencies, the dollar-denominated mortgage bond interest payments lose value, too, in relative terms. As a result, investors sell their holdings which increases the open market supply, and causes bond prices to fall.

In Bond World, prices and rates move in opposite directions. As bond prices fall, mortgage rates rise.

The reverse is true, too.  When the U.S. Dollar gains in value, the lure of mortgage bonds grows, helping mortgage rates to fall. 

The dollar is not the only reason why mortgage rates move each day, of course -- there are literally hundreds reasons why -- but its influence can be quite strong when the greenback goes on a run.

Now may be one of those times.

As tales of economic despair emerge from nearly every country on Earth, investors are seeking safer places for their money.  Versus the 2005-2006 plan of stashing cash in high-risk, high-return countries, investors now direct funds to relatively large and stable economies, including the United States.

It's not to say that the U.S. economy is healthy, but versus everyone else, we're golden.  Remember: The government now owns Fannie Mae and Freddie Mac and it can print as much money as needed to pay interest to mortgage bond holders.

For now, this is awesome for rates.  Investors are buying up bonds and rates are hovering near 5 percent when all the economic data says we should be near six instead.  It won't last forever, though. Someday, monetary supply inflation will set it.  When it does, the dollar's value will plummet and mortgage rates will soar. 

It could happen in the next 12 months, the next 12 weeks, or the next 12 days.

So, if you're wondering whether or not "now" is a good to refinance to refinance, consider that the U.S. dollar is holding rate down right now and that's lucky for rate shoppers. However, rates really can't fall all that much further from where they are right now, and they do have the potential to rise by a lot in the near-term.

Make sure you don't miss real-time changes in the mortgage market, watch for my Twitter feed at http://www.twitter.com/mortgagereports. I post several updates each day as mortgage rates are moving.