Finance
What is the primary purpose of the Federal Reserve's monetary policy in relation to Nevada mortgage rates?
AThe Federal Reserve directly sets all Nevada mortgage rates
BThe Fed's decisions on the federal funds rate influence overall interest rate levels, which indirectly affect Nevada mortgage rates through their impact on Treasury yields and lender funding costs✓ Correct
CThe Fed insures all Nevada residential mortgages
DThe Fed has no influence on Nevada mortgage rates
Explanation
The Federal Reserve's decisions on the federal funds rate influence short-term borrowing costs. Mortgage rates (tied to 10-year Treasury yields and MBS markets) are indirectly influenced by Fed policy. When the Fed raises rates to fight inflation (as in 2022–2023), Nevada mortgage rates typically rise.
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