Question about Yield Curve Strategies (Reading 24)

Hi guys and happy new year! I am just stuck at P.140 of CFA textbook (Vol.4, Reading 24). I cannot quite understand the meaning of “the NZD curve moves to reflect today’s implied forward rates” and the explanation that follows. Would be much grateful if you guys could explain it. Thanks a lot!

Suppose that today’s 1-year spot rate is 1% and today’s 2-year spot rate is 2%. The implied 1-year forward rate starting one year from today is:

1.022 / 1.01 − 1 = 3.0099%

What they’re saying is that one year from today the 1-year spot rate will be 3.0099%.

And so on.

Sorry for the late reply. Thank you so much and have a good day!

My pleasure.

Magician please explain explanation beyond that saying implied forward rate is higher than the spot fixed rate and loss that happens in value of the bond offsets yield advantage … I got this theoretically , can you please elaborate more.