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Recent cuts in Oil Production by OPEC+ has caused a rise in energy prices and threaten to undermine the Federal Reserve's success in lowering inflation
Recent cuts in Oil Production by OPEC+ has caused a rise in energy prices and threaten to undermine the Federal Reserve's success in lowering inflation back to target. Imagine that these higher oil prices both cause a deterioration in business sentiment and lead investors to expect that the Fed will sell more bonds in the future than previously expected. What will be the combined effect of both lower business sentiment and expected Fed bond sales for the equilibrium quantity of bonds in the market
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