Finance
The Federal Reserve's primary tool for influencing mortgage interest rates is:
ADirectly setting the 30-year fixed mortgage rate for all lenders
BSetting the federal funds rate, which influences overall interest rate levels✓ Correct
CPurchasing all FHA-insured mortgages on the secondary market
DImposing rate caps on adjustable-rate mortgages
Explanation
The Federal Reserve's primary tool is the federal funds rate — the overnight lending rate between banks. Changes to the fed funds rate influence short-term and long-term interest rates broadly, including mortgage rates.
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