San Francisco Federal Reserve President Janet Yellen said today that the housing and financial markets could deteriorate further before a recovery takes place, which she expects to happen in 2009. Speaking in San Diego, Yellen noted that "Things could get worse before they get better." (I know really?!?)

The non-voting Fed member warned that headline inflation is likely to remain "much higher" than the central bank would like as commodity prices continue to inflate the reading. Additionally, she believes that core inflation excluding energy and food prices will be "modestly higher" until early 2009, when it will begin to level off.

Speaking of energy prices, August-dated crude oil hit a session low of $140.15 per barrel today as the U.S. dollar flexed some muscle against its foreign rivals. The contract last traded at $141.70, down $2.44 per barrel.

And, if you're craving more Fed commentary, you'll only have to wait until tomorrow. On Tuesday, Chairman Ben Bernanke and Richmond Fed Governor Jeffrey Lacker will both share their innermost economic thoughts with us.