IMF says central banks should focus on explaining policy flexibility rather than fixed plans
The IMF argues central banks should communicate by explaining how policy responds to changing conditions rather than committing to a fixed path.
In an uncertain world of frequent economic shocks, central bank communications should be designed to anchor expectations by showing how policy will adapt to changing conditions. Rather than committing to a predetermined path, central banks should focus on explaining their responsive approach to new information and circumstances.
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Rethinking central bank communication in an uncertain world
In a world of frequent shocks, central bank communications should anchor expectations by explaining how policy responds to changing conditions, rather than committing to a fixed path, says the IMF