P 5-39 (book/static) :Question Help 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 higher inflation. Based on the yield curve, can you tell whether the bond market was concerned about inflation? Explain. 2 3 5 10 30 Term Rate (EAR, %) 0.13 0.32 0.53 1.12 1.62 2.21 3.36 (Select from the drop-down menus.) If the bond market were particularly concerned about inflation, it would be reflected in much higher long-term nominal rates (which would have to reflect real rates plus higher future inflation). While long-term rates are certainly higher than short-term rates, they are still quite by historical standards, so there wa lot of inflation expectation built in