This implies that 14 6 expected future 1 year rate or

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3) If the Fed lowers short term interest rates by 1/2% but investors believe this is just a temporary reduction which will only last a few months, and therefore their expectations of future short term interest rates remain unchanged, what will happen to the yield on 10 year Treasury bonds?
4) If at a point in time long term interest rates were below short term interest rates, what would this indicate about investors expectations of future short term interest rates? Explain your answer in a few sentences.

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