Nominal interest rates are quoted at a variety of maturities. corresponding to different lengths of loans. For example. in late 2004 the U.S. government could take out 10-year loans at an annual interest rate of slightly over 4 percent. whereas the annual rate it paid on loans of only three months' duration was slightly under 2 percent. (An annualized interest rate of 2 percent on a three-month loan means that if you borrow a dollar, you repay S 1.005 = S I + (3/12) x $0.02 at the end of three months.) Typically, though not always. long-term interest rates are above short-term rates. as in the preceding examples from 2004. In teats of the Fisher effect. what would that pattern say about expected inflation and/or the expected future real interest rate?