Central Bank Messages Move Household Inflation Expectations, Study Finds

Tighter stance communication shocks, which signal a more restrictive policy, lowered households' one-year-ahead inflation expectations. Expansionary information shocks, by contrast, raised them, especially when household attention was high. Conventional shocks identified through high-frequency asset-price moves did not produce the same responses, the paper said.

The findings qualify the view that central bank communication rarely reaches the public. The effects depend on how the messages are received and perceived, the researchers said.