Finance
The Federal Reserve's primary tool for influencing mortgage interest rates is:
ASetting maximum LTV ratios for all loans
BAdjusting the federal funds rate✓ Correct
CRequiring larger down payments
DPurchasing mortgage-backed securities exclusively
Explanation
The Federal Reserve influences interest rates primarily by adjusting the federal funds rate — the rate banks charge each other for overnight lending. Changes to this rate ripple through the economy, affecting mortgage rates.
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