Finance
The Federal Reserve's monetary policy affects Arizona mortgage rates primarily because:
AThe Fed directly sets all mortgage rates
BFed rate decisions influence short-term interest rates and bond markets, which indirectly affect long-term mortgage rates✓ Correct
CThe Fed sets maximum allowable mortgage interest rates
DMortgage rates are determined solely by local lenders
Explanation
The Fed controls the federal funds rate (short-term). Mortgage rates are tied to long-term bond yields, particularly the 10-year Treasury.
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