Central bank communication and the anchoring of inflation expectations

Forward guidance — central banks' public communication about the likely future path of policy — is widely credited with helping anchor inflation expectations. Whether it anchors household expectations as reliably as market expectations is a narrower and less settled question.

Comparing survey-based household inflation expectations with market-implied breakeven rates across eight economies, we find market expectations respond quickly and consistently to guidance changes, while household expectations move more slowly and correlate more strongly with recent food and fuel price experience than with policy statements.

This gap matters for policy design: guidance calibrated to move market pricing may do relatively little to shift the expectations that feed most directly into wage-setting and consumer behaviour.

The comparative dataset, including the survey instruments used in each economy, is published alongside this analysis.