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I understand that a decrease in prevailing market interest rate would causecauses a downward pressure on the bond yield and, equivalently, an upward pressure on the bond price. But what if a decrease in interest rate leads the investors to anticipate an inflation? Wouldn't the anticipation of an inflation cause the bond to be worth less and subsequently exert a downward pressure on the bond price?

I understand that a decrease in prevailing market interest rate would cause a downward pressure on the bond yield and, equivalently, an upward pressure on the bond price. But what if a decrease in interest rate leads the investors to anticipate an inflation? Wouldn't the anticipation of an inflation cause the bond to be worth less and subsequently exert a downward pressure on the bond price?

I understand that a decrease in prevailing market interest rate causes a downward pressure on the bond yield and, equivalently, an upward pressure on the bond price. But what if a decrease in interest rate leads the investors to anticipate inflation? Wouldn't the anticipation of inflation cause the bond to be worth less and subsequently exert a downward pressure on the bond price?

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I understand that a decrease in prevailing market interest rate would cause a downward pressure on the bond yield, and, equivalently, an upward pressure on the bond price. But what if a decrease in interest rate leads the investors to anticipate an inflation? Wouldn't the anticipation of an inflation cause the bond to be worth less and subsequently exert a downward pressure on the bond price?

I understand that a decrease in prevailing market interest rate would cause a downward pressure on the bond yield, and equivalently, an upward pressure on the bond price. But what if a decrease in interest rate leads the investors to anticipate an inflation? Wouldn't the anticipation of an inflation cause the bond to be worth less and subsequently exert a downward pressure on the bond price?

I understand that a decrease in prevailing market interest rate would cause a downward pressure on the bond yield and, equivalently, an upward pressure on the bond price. But what if a decrease in interest rate leads the investors to anticipate an inflation? Wouldn't the anticipation of an inflation cause the bond to be worth less and subsequently exert a downward pressure on the bond price?

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Why does bond price go up with interest rate decrease?

I understand that a decrease in prevailing market interest rate would cause a downward pressure on the bond yield, and equivalently, an upward pressure on the bond price. But what if a decrease in interest rate leads the investors to anticipate an inflation? Wouldn't the anticipation of an inflation cause the bond to be worth less and subsequently exert a downward pressure on the bond price?