Assume that the term premium is $0$ and the expectations theory of the term structure is the correct framework. You observe that the interest rate on a $1-$year Treasury

$1$

security is $2\%,$ and the interest rate on a $2-$year Treasury security is $4\%.$ What is the market's expectation for $1-$year interest rates next year? What does this say about the market's expectations for the future state of the economy?