ECB’s Praet says monetary policy communication faces several distinct challenges

ECB chief economist Praet at the 2-day forum on CB commiunicationsWe heard from the not-so fantastic four yesterday of course.
Full speech here. Perfect for a mid—session nap
Praet concludes:

Monetary policy communication faces several distinct challenges. It has to be accessible to and useful for a variety of audiences. It has to be consistent in diverse economic circumstances. And it has to clearly convey the central bank’s reaction function, also when the latter entails a diverse set of instruments.

To meet these challenges, the ECB’s communication uses a broad range of channels to express the Governing Council’s policy intentions at euro area level and to explain it to national audiences. It has made further efforts to make this reaction function understood by markets and the broader public, not least by providing detailed information on the thinking underlying its actions. And, in recent years, it has made its reaction function more transparent and concrete by adopting an integrated forward guidance framework.

We will continue to engage with the general public and to guide market expectations as new challenges arise. This means that we have to continue reflecting and having constructive debates on how to shape central bank communication in the future.

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