during the cycle itself, the statements issued after each meeting of the fomc provided qualitative guidance about the likely future path of policy and its dependence on economic events. providing information about the expected path of policy helped to ensure that long - term interest rates and other asset prices did not build in a projected pace of tightening that was more rapid than the committee itself anticipated, and the statement's focus on the conditionality of future policy actions emphasized the ongoing need for both policymakers and financial market participants to respond to economic news. in retrospect, the clear communication of policy provided notable benefits, in my view, by increasing the effectiveness of monetary policy while minimizing unnecessary volatility in financial markets. third, policy moved gradually, tightening in one - quarter point increments over fourteen successive meetings. together with expanded communication, this gradual approach served to stabilize policy expectations and damp market volatility. in addition, the measured pace of rate increases gave the committee time to observe the progress of the economy and to adjust its plans and communications strategy accordingly. 1 to be sure, gradualism was possible only because inflation expectations remained contained - - testimony to the importance of a central bank's retaining credibility in financial markets and among businesses and households. a fourth interesting aspect of the latest tightening cycle, which is my principal focus this evening, is the behavior of long - term interest rates. since june 30, 2004, the overnight interest rate has moved up 31 / 2 percentage points, but the ten - year nominal treasury yield has only edged higher. at less than 4 - i spoke about this in more detail in " gradualism, " a speech delivered at an economics luncheon co - sponsored by the federal reserve bank of san francisco ( seattle branch ) and the university of washington, seattle, may 20, 2004. 3 / 4 percent, that yield is not much above the target federal funds rate of 4 - 1 / 2 percent and, indeed, is about even with yields for maturities of one to three years. in the remainder of my remarks i will speculate on the reasons for and consequences of this historically unusual behavior of long - term rates. the recent behavior of longer - term yields some discussion of the arithmetic of longer - term yields provides a useful perspective on recent developments in bond markets. the ten - year treasury yield, for example, can be viewed as a weighted average of the current one - year rate and nine one - year forward rates, with the weights depending on

we will also provide education on how to conduct transactions in safer and more secure fashions, especially given the increasing importance of electronic commerce, online banking and electronic money. this pushes along the desired path of being less dependent on physical cash in our daily transactions. we are pleased to be partnering with the clearing banks ’ association with this campaign. we will also be working with several industry stakeholders throughout the year to ensure that the campaign is well - rounded, relevant, and can reach as many people as possible. we encourage the public to visit the campaign website www. getmoneysmartbahamas. com /, for 1 / 2 bis central bankers'speeches information that will be updated at regular intervals throughout the year. we also encourage the public to follow get money smart bahamas on facebook and twitter and to join the conversation online using the hashtag # getmoneysmartbahamas. 2 / 2 bis central bankers'speeches