Due to a recession, expected inflation this year is only 2.75%. However, the inflation rate in Year
Due to a recession, expected inflation this year is merely 2.75%. However, the inflation blame in Year 2 and therefollowing is expected to be faithful at some plane aloft 2.75%. Assume that expectations assumption holds and the veritable risk-free blame is r* = 3%. If the concede on 3-year Treasury bonds equals the 1-year concede plus 3%, what inflation blame is expected following Year 1? Round your apology to two decimal places.