Newspaper reports about good news in the economy are often followed by declines in stock and bond prices because

Question

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When there is good news in the economy, it often leads to expectations of increased spending and economic growth, which can cause inflation. In response, the Federal Reserve may raise interest rates to cool down the economy and prevent overheating. This can negatively impact stock and bond prices, as higher interest rates make these investments less attractive compared to other options like savings accounts or certificates of deposit. Therefore, stock and bond holders may fear the Fed's reaction and sell off their investments, causing prices to decline.

Newspaper Reports About Good News in the Economy Are Often