2. To stop the inflation rate from decreasing further, the European Central Bank (ECB) is expected to
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2. To stop the inflation rate from decreasing further, the European Central Bank (ECB) is expected to start buying government bonds in the secondary market soon. Huw Worthington, European interest rate strategist at Barclays, believes that the market has responded to this expectation even before the ECB has acted on it. So the yield will probably increase if the ECB does not do so. Explain how?38
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