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mpc: 4 Comparing interest rates with their levels in November, the sterling, dollar and euro yield curves were all lower. Over that period, there had been a more marked fall in long-term forward rates in the United States than elsewhere, perhaps associated with hedging activity in the US mortgage-backed securities market. These falls in yield curves were difficult to explain in terms of news about demand and output, as that had been broadly positive since November. It was more likely that market participants had reassessed the probable actions of the monetary authorities. In the United States, the FOMC statement published in December had been widely interpreted as implying that US rates would remain low for some time. This interpretation might also have suggested that interest rates elsewhere in the world would be lower than previously expected, as a result of the likely impact of US interest rates on exchange rates against the dollar. In the United Kingdom, the MPC's November inflation projections and the subsequent MPC minutes might have led market participants to conclude that the sterling yield curve immediately after the November repo rate increase implied a greater degree of monetary tightening than would in fact be necessary.