Finance
The Federal Reserve's primary tool for influencing mortgage interest rates is:
ASetting maximum loan amounts for FHA loans
BAdjusting the federal funds rate✓ Correct
CRequiring lenders to hold larger reserves
DBuying and selling individual mortgage loans
Explanation
The Federal Reserve influences interest rates primarily by adjusting the federal funds rate—the rate at which banks lend to each other overnight. Changes in this rate affect mortgage rates throughout the economy.
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