Edition November 11, 2026

Philip R. Lane: The science and practice of monetary policy communication: the ECB experience

New text-analysis tools, including large language models, indicate that ECB communication moves financial markets both between policy meetings and on meeting days.

Households’ and firms’ attention to inflation rises and falls with inflation itself, making clear and consistent communication especially important when inflation is high. The ECB’s framework guidance sets out the reaction function and the criteria behind its decisions, helping markets interpret incoming data.

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