4  BIS Review 57/2004  the federal funds rate alone account for only a small portion of the change in expectations around FOMC decisions.7 Over the short period around a policy decision, FOMC statements, not the rate-setting action itself, have the greater influence on year-ahead rate expectations, particularly when the content of the statement is not fully anticipated by market participants.8 For example, according to our estimates, a policy statement that surprises the market leads market participants to revise their year-ahead rate expectations about 14 basis points more than they would have in the absence of such a statement.
Of course, “kicking a ball” with friends in a park such as the English Garden is a more informal affair than the matches you might see in the professional football leagues, where the stakes are arguably much higher. But the basic principles of football apply everywhere. The direction of play is the first decision to be made before any match can begin.