Central Bank Communication

About Central Bank Communication

Central bank communication has evolved dramatically. Before the 1990s, central banks were deliberately opaque. Markets were expected to divine policy intentions from small signals. Alan Greenspan famously said if you understand what I said, I misspoke. The shift to transparency began with inflation targeting in the early 1990s. New Zealand and Canada were first to announce explicit inflation targets. Ben Bernankes Fed introduced forward guidance, communicating future policy intentions. Central banks began publishing minutes, economic forecasts, and dot plots. Mario Draghis whatever it takes was a masterpiece of communication. Janet Yellen and Jerome Powell continued the transparency trend. Modern central banking relies heavily on communication as a policy tool. The Bank of England publishes Monetary Policy Committee minutes and votes.