Market forces (supply and demand)
determine equilibrium pricing for long - term bonds, which set long - term interest rates.
But in such a system the hot - potato effect is actually very strong and it is this which
determines an equilibrium price level.
Not exact matches
But bond markets are just like any other market — the
price of bonds is
determined by an
equilibrium being established between the available supply and demand for the bond at any given point in time.