Assume that:

$1)$ Investors and borrowers expect that the economy will weaken and that inflation will decline.

$2)$ Investors require a small liquidity premium.

$3)$ Markets are partially segmented and the treasury currently has a preference for borrowing in short$-$ term markets.

Required:

A$)$ Explain how each of these forces would affect the term structure, holding other factors constant.

B$)$ Then explain the effect on the term structure Overall.