The bond market was concerned about inflation

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Reference no: EM131956416

See the Treasury Yield Curve from June 2013 below. At the time, some were concerned about whether the Federal Reserve’s stimulus activities would lead to high inflation. Based on the Yield Curve, can you tell whether the bond market was concerned about inflation? Explain.

Term (in years) 1, 2, 3, 5, 7, 10, 30

Rate (EAR, %) 0.13, 0.32, 0.53, 1.12, 1.62, 2.21, 3.36

Reference no: EM131956416

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