In general,if inflation is expected to increase,bond prices will increase.

Question

Quizplus · Accepted Answer

When inflation is expected to increase, bond prices usually decrease. This is because inflation erodes the purchasing power of the fixed interest payments that bonds offer, making them less attractive to investors. As a result, investors demand higher yields on bonds to compensate for the anticipated increase in inflation, which causes bond prices to fall.

In General,if Inflation Is Expected to Increase,bond Prices Will Increase