If the public expects the Fed to pursue a policy is likely to raise short-term interest rates

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If the public expects the Fed to pursue a policy is likely to raise short-term interest rates permanently to 12% but the Fed does not go through with this policy change, what will happen to long-term interest rates?
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Economics of Money, Banking and Financial Markets

ISBN: 978-0321598905

9th Edition

Authors: Frederic S. Mishkin

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Question Posted: Aug 12, 2012 04:35 AM

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If the public expects the Fed to pursue a policy is likely to raise short-term interest rates

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