I don't seem to understand the effects of QE.
Fed uses open market to purchase long-term government bonds which pushes up the demand for bonds and drives up the price of bonds. However, this injection of money into the market can also drive up the inflation expectation. This expectation makes people demand higher interest from long-term bonds lowering the current bond price.
Am I correct on this analysis? If so, what's the total effect of these two forces?