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Yield curve, and inflation rate

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Consider the following yield curve. (See the attachment file please. )

What is the market predicting about the movement of future short-term rates?

What might the yield curve predict about inflation rate in the futre?

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The solution answers the following questions about yield curve using the example attached:
What is the market predicting about the movement of future short-term rates?
What might the yield curve predict about inflation rate in the futre?

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Market is predicting (according to the "Expectations Theory") that the short term (about 1 year) rates will remain constant. This is evident from the flat yield curve in the ...

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