18. If the only rates that the Fed adjusts are short-term inter-bank rates such as the Fed Funds rate, why has the rate

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18 If The Only Rates That The Fed Adjusts Are Short Term Inter Bank Rates Such As The Fed Funds Rate Why Has The Rate 1 (137.4 KiB) Viewed 18 times

18. If the only rates that the Fed adjusts are short-term inter-bank rates such as the Fed Funds rate, why has the rate on 30-year fixed residential mortgages doubled over the past few months? 19. Fixed-rate, long-term lending is quite prevalent in the U.S. for real estate transactions, but is virtually unknown in Europe, where rates are routinely adjusted every three-to-six months. How would variable-rate lending affect the underwriting process for residential lending were the U.S. to switch to the European model? Explain in detail