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How does the Federal Reserve's interest rate policy affect mortgage rates?
Posted : 28/04/2024 3:35 pm
The Federal Reserve affects mortgage rates indirectly by implementing monetary policies that impact the price of credit. When the Fed makes borrowing more expensive by increasing the federal funds rate, banks pass the costs on to their customers, and interest rates on consumer borrowing, including mortgage rates, increase. The Fed also buys and sells debt securities, which has an overarching impact on mortgage rates.
Posted : 30/04/2024 10:34 pm