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September 15, 2003 Appendix 1: Materials used by Mr. Reinhart 72 of 78 September 15, 2003 73 of 78 Exhibit 1 Five General Principles about the Announcement (1) Respect the important role of the discussion at the meeting (2) Do not unnecessarily complicate forging a consensus (3) Make use of a key communications channel with the public (4) Avoid mistakes (5) Preserve the confidentiality of the decision until its release September 15, 2003 74 of 78 Exhibit 2 A Few Models Respect Do not Use Avoid Preserve discussion of complicate communication mistakes confidentiality consensus channel decision (1) Federal Reserve of the early 1990s Do not issue a statement (orperhapsonly one limited to the vote on thefunds rate) (2) Bank of England Release a simplfied statement and expedite the + + + + + - + - + + + publication of the minutes (3) Bank of Canada Draft the statement after the policy decision, which would require delaying its release + (4) Federal Reserve of the late 1980s Routinize parts of the statement and circulate staff alternatives in advance + + + + (5) Federal Reserve of the 2000s Review a prepareddraft statement after the decision + ? + September 15, 2003 75 of 78 Exhibit 3 Some Questions about Content (1) (2) Is the Committee satisfied with the three-part risk assessment initiated in May? o Risks to sustainable economic growth o Risks to price stability o The balance of those two risks What does "sustainable" economic growth mean? o Economic growth at the rate of potential output o Economic growth that does not create imbalances (3) Does "risk" have a negative connotation? (4) How long is the "foreseeable" future (5) Should the Committee include a commitment that policy will be kept accommodative for a considerable period? September 15, 2003 Appendix 2: Materials used by Mr. Poole 76 of 78 September 15, 2003 77 of 78 Figure 1: Predicted and Actual Changes in the Funds Rate, Quarterly (triangles denote actual changes, dots denote predicted changes) 1 0.75 0.5 0.25 0 -0.25 -0.5 -0.75 -1 -1.25 -1.5 -1.75 I . .* . . . . .. . . . .. . . .p , , The data are daily for the business day closest to the 15thof the last month of the quarter. The actual change (black line) is the difference between the zero-month futures rate at t and t-3. The predicted change (the red dot) is difference between 3- and zero-month futures rates at t-1. , p September 15, 2003 78 of 78 Figure 2: Scatter Plot of Predicted and Actural Changes in the Funds Rate, Quarterly 0.75 0.5 0.25 -- 0 i ** , 0- w -0.25 -0.5 -0.75 -1 -- + -1.25 -1.5 -1 -0.8 -0.6 -0.4 -0.2 0 0.2 Predicted Change The data are daily for the business day closest to the 15thof the last month of the quarter. The actual change is the difference between the zero-month futures rate at t and t-3. The predicted change is difference between 3- and zero-month futures rates at t-1. 0.4 0.6 0.8
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