Suppose that an unemployment report shows lower than anticipated unemployment and upward pressure on

If the goal of the Fed is to prevent inflation, what will be the anticipated impact of this report on the money supply, interest rates, and bond prices?

Suppose that an unemployment report shows lower than anticipated unemployment and upward pressure on wages.?credit score

The conventional answer is, upward pressure on wages suggests inflation is coming. To forestall this, the Fed might raise interest rates, which would make bond prices fall.

In reality, unemployment figures are considered lagging indicators of what%26#039;s next for the economy, describing what%26#039;s already happened rather than the direction the economy is currently heading. Everyone at the Fed and in the bond markets knows this. So rates might only go up very little, or not at all, and bond prices consequently won%26#039;t fall very much either.

Suppose that an unemployment report shows lower than anticipated unemployment and upward pressure on wages.?

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you got it wrong girl. Fed isnt to prevent inflation. their job is to maintain finacial markets. To provide liquidity and to take out liquidity.