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U$.$S$.$ bond prices are normally inversely related to U$.$S$.$ inflation. If the Fed planned to use intervention to strengthen the dollar, how might bond prices be affected?

Expectations of a strong dollar places $-$Select$-$upwarddownwardItem $1$ pressure on U$.$S$.$ prices and therefore cause expectations of $-$Select$-$lowerhigherItem $2$ inflation, which tends to place $-$Select$-$upwarddownwardItem $3$ pressure on interest rates. Because there is an inverse relationship between interest rates and bond prices, bond prices would be expected to $-$Select$-$declineincreaseItem $4.$