Graph of inflation rates since 1972.
History shows us that rising inflation causes the 10-year Treasury yield to drift up as investors buy stocks instead of bonds. Particularly, higher inflation erodes the return that the investor of a bond or loan is holding over time and bonds are not any more attractive to investors. This in turn makes bond values go down and yields rise. Consequently, mortgage rates move upward as they are tied to the 10-year Treasury yield.