Question: Let's try to find out how inflation affect nominal interest rates. To do so: a. Plot the three-month U.S. Treasury bill rate (FRED code: TB3MS)

 Let's try to find out how inflation affect nominal interest rates.

Let's try to find out how inflation affect nominal interest rates. To do so: a. Plot the three-month U.S. Treasury bill rate (FRED code: TB3MS) from 1960 to the present. What long-run pattern do you observe? What may have caused this pattern? b. Plot the inflation rate based on the percent change from a year ago of the U.S. consumer price index (FRED code: CPIAUCSL) from 1960 to the present. How does U.S. inflation history reflect your explanation in part (a

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