Finance
In Missouri, the Federal Reserve's monetary policy affects mortgage rates because:
AThe Fed directly sets mortgage rates
BFed policy influences short-term interest rates and inflation expectations, which affect long-term mortgage rate benchmarks✓ Correct
CThe Fed guarantees all Missouri mortgages
DMissouri mortgage rates are tied only to state policy
Explanation
The Federal Reserve does not set mortgage rates directly, but its decisions on the federal funds rate influence short-term rates and inflation expectations. 30-year fixed mortgage rates typically track the 10-year Treasury yield, which responds to Fed policy.
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