Central bank communications can be a tricky business, but it has long been understood that shifting perceptions of policy can have an immediate effect on market prices and investors’ portfolio decisions.
Indeed, financial markets reacted strongly to the first statements by Chairman  15  Among studies of spillovers from conventional versus unconventional U.S. monetary policy, Rogers, Scotti, and Wright (2014) report no significant differences in relative announcement effects on advanced foreign economy asset prices and Treasury yields; Bowman, Londono, and Sapriza (2014) find similar EME asset price responses; Takáts and Vela (2014) report mixed results for EMEs, with a weaker post-2007 relationship in levels of EME policy rates with U.S. rates but a stronger post-2008 relationship in levels of five-year yields; and Glick and Leduc (2013) also report similar spillovers to exchange rates.