Finance
The Federal Reserve's monetary policy decisions affect NC mortgage interest rates primarily because:
AThe Fed directly sets all mortgage rates
BChanges in the federal funds rate influence the cost of funds for lenders, which affects mortgage rates✓ Correct
CNC banks must match the federal funds rate on all mortgages
DMortgage rates are set by FHFA based on Fed guidelines
Explanation
The Fed's adjustments to the federal funds rate influence the overall cost of borrowing for financial institutions, which in turn affects the rates lenders charge on mortgages.
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