Figure 3 provides an illustration. The lower, dashed line shows the path of the expected federal funds rate through 2008 as implied by federal funds and eurodollar futures at the close of the market on April 1, 2004, with an adjustment for the average level of term premiums.
The upper, solid line shows the path of expected funds rates as of the market close on the next day, April 2. As you probably know, the payroll employment numbers announced on April 2 significantly exceeded market expectations.