1. If the required liquidity premium for a short-term investor is 2%, what must be the expected short rate if the forward rate is 5%? 2. How are movements in the bond market that are widely watched on...

1. If the required liquidity premium for a short-term investor is 2%, what must be the expected short rate if the forward rate is 5%?

2. How are movements in the bond market that are widely watched on Wall Street ultimately felt on Main Street (the real economy)?