A strong dollar places ____ pressure on U.S. inflation, which in turn places ____ pressure on U.S. interest rates, which in turn place ____ pressure on U.S. bond prices.

Question

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A strong dollar makes imported goods cheaper, which puts downward pressure on U.S. inflation. However, this lower inflation rate increases the likelihood of the central bank raising interest rates to maintain stability, putting upward pressure on U.S. interest rates. These higher interest rates then put downward pressure on U.S. bond prices.

A Strong Dollar Places ____ Pressure on U