This would lower investor expectations for the path of short - term interest rates, and in so doing
put additional downward pressure on long - term interest rates.
Real GDP is now projected to have contracted modestly in the first half of the year, resulting in higher excess capacity and
additional downward pressure on inflation.
This new cash will
exert additional downward pressure on short - term yields and motivate investors to extend maturity or move into higher yielding fixed income securities.
«Sentiment being a powerful factor in markets, these buyer expectations have become a self - fulfilling prophecy,» the newsletter said, adding that buyers know they are
creating additional downward pressure on prices by delaying purchasing decisions.
Additional downward pressure on interest rates was created by the high and rising US current account deficit, which peaked along with the housing bubble in 2006.
Additional downward pressure on the unemployment rate is likely to occur in the coming months as job growth continues to exceed labor force growth.