For practical purposes, therefore, monetary conditions tightened significantly the day of the March employment report, notwithstanding the fact that the federal funds rate itself was unchanged. This episode illustrates both the power and the importance of clear communication by monetary policymakers about their objectives and their evaluation of economic conditions.
This is largely due to transportation constraints, but was compounded this autumn by maintenance shutdowns in some key US refineries. Since our October rate decision, the heavy oil discount has declined somewhat as US refineries have come back on line.