Finance
The Federal Reserve's monetary policy affects Indiana mortgage rates because:
AThe Fed directly sets all mortgage interest rates
BChanges in the federal funds rate influence short-term interest rates and market expectations, which affect long-term mortgage rates✓ Correct
CThe Fed requires all Indiana banks to follow its mortgage rate schedules
DThe Fed directly purchases Indiana mortgage-backed securities
Explanation
While the Fed does not directly set mortgage rates, its monetary policy (especially the federal funds rate) influences the overall interest rate environment. Long-term mortgage rates are more closely tied to the 10-year Treasury yield.
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